Mexican steel trade organization CANACERO has stated that a report issued by the US Department of Commerce (USDOC) in late February 2018 makes recommendations “that would drastically limit access to the U.S. market for steel from the other NAFTA countries, and would affect various chains of production, attempting to [unwind] NAFTA’s (North American Free Trade Agreement's) integration objectives.”
The Department of Commerce recommendations are tied to the U.S. making a “national security” case under Section 232 of the Trade Expansion Act of 1962.
CANACERO states, “We are a fully integrated region, [with] the majority of U.S. steel exports being made to Mexico and Canada, which is described in the USDOC document itself.”
The group continues, “The USA consistently has a trade surplus in steel products with Mexico. In the last 10 years, U.S. steel exports to Mexico have increased 58 percent, going from $6.2 trillion in 2008 to $9.8 trillion in 2017. In 2017, the U.S. trade surplus with Mexico in steel and steel products reached $3.4 trillion dollars, which shows how important the Mexican market is for the steel industry in the U.S.”
CANACERO says the Section 232 investigation, using a pretext of national security, “seeks to stop U.S. imports mainly caused by global overcapacity [and] production of steel generated by government subsidy actions [in nations] with principles of centrally planned economies, as is the case [in] China.”
The group says, “The North American steel industry shares the problem of global overcapacity and imports under unfair practices, [and] should continue to fight together as a region without limiting their markets among the three countries. Mexico should NOT be included in the resolution of Section 232, since it does not represent any risk for the national security of the USA, since we are an industry that does not receive government subsidies [and] we are not part of global excess capacity.”
Concludes CANACERO, “We respectfully exhort the Mexican government to evaluate the measures of reciprocity that Mexico could take in the case of being included in this measure, as well as to communicate formally to its U.S. counterparts the serious implications this would have for the, especially during the negotiation of NAFTA.”