Q&A with ISRI's Adina Renee Adler on the USMCA

Recycling Today recently interviewed Adina Renee Adler, vice president of advocacy for the Institute of Scrap Recycling Industries (ISRI), based in Washington, to discuss the United States-Mexico-Canada Agreement, the trade pact that replaced NAFTA July 1. Here are edited excerpts from that discussion, starting with Adler's summary of the USMCA:

Adler: So, USMCA, the U.S.-Mexico-Canada Agreement, entered into force July 1, 2020, at which time the former North America Free Trade Agreement, NAFTA, sunsetted. This is the result of negotiations that were kicked off shortly after President Donald Trump became president. One of the enhancements of the USMCA over NAFTA — which is a benefit to most industries that trade across borders — is the fact that they're ensuring that the customs processing is more digital. That information about how to process customs, how to communicate with customs agencies, even how to adjudicate disputes, that all can be done electronically.

The other thing that the negotiators thought through was how to enhance the opportunity for more content that is made in North America that goes into an automobile that is made in North America. And this is for purposes so that when that automobile is finished and it can be moved across the partner's land borders that it can do so duty free because it's made with a significant amount of content from North America.

Scrap that is processed in the United States often will go into Canada or go into Mexico and be reprocessed into aluminum sheet or steel rebar that is sent back to the United States to be reshaped into something that could then go on to the next step to become an auto part. For that, the part may have to go back into one of the other jurisdictions.

Kaily Cunningham, Recycling Today digital editor: How will U.S. recyclers and the mills they supply benefit from a lot of these new requirements that are different from NAFTA?

Adler: The scrap industry is heavily dependent on supply and demand, and the demand pull comes from these heavy industries, like automobiles, aircraft and the construction sector. Because of North American content requirements, the more that demand can be pulled. This trade is facilitated because of electronic processing at the borders. Also, I don't want to forget that there are businesses that are located on both sides of the boarders. So you might have a manufacturing facility on one side of the border, but the employee or the management lives on the other side, and we want to make sure that those people can also cross borders fairly easily and, so there is something written into the agreement for that as well.

Cunningham: Can you talk about, in general, how a lot of the details of this agreement impact jobs and how they move these economies forward, especially with everything that's going on right now.

Adler: I believe it's about 167,000 jobs (actual number 161,000) in America that are dependent on the trade of scrap commodities, and that's trade with lots of countries around the world, but definitely specifically with Canada and Mexico—which make up a significant portion of U.S. scarp trade. These are well-paying jobs, and early on with COVID-19, we were successful immediately with the United States, very shortly after with Canada, and it took a little bit longer in Mexico, but we eventually got there, which was to gain a designation of being an essential industry essential to the manufacturing supply chain and, so as a result of those designations in all three countries, the industry was largely able to stay open in the face of closure orders. 

Cunningham: These changes that come with the USMCA, what kind of financial impact do you expect that to have on imports as well as exports for the U.S.? 

Adler: I don't know that I expect a dramatic initial change to exports and imports, whether by volume or by value, because those supply chains had been around for so long. You know, it's kind of business as usual. Although it's really important to have this agreement in place, in some ways it just kind of reaffirms some stability in the marketplace because things are not going to change dramatically. Also, the auto industry because of the pandemic has been granted a grace period before they have to come to full compliance with those rules of origin. Until that time happens, we won't see that increase in trade as a direct result of the agreement and it's, unfortunately, because the pandemic sort of got in the way.

Cunningham: How do you think COVID-19 may have hurt or delayed things or complicated things and then, on the flip side of it, do you think there's any way that it kind helped and pushed people to either be more flexible or more understanding?

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Sponsored Content

SENNEBOGEN 340G telehandler improves the view in Macon County, NC

An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).

Adler: The pandemic forced the auto industry to have to close for a while, and while they were closed, they were making PPE. So now they've started to reopen, I think at the end of May, they should be somewhat back online. But I don't know what their production levels are. I don't know if they’re still making PPE in addition to making automobiles. I don't think they're at full capacity; they’re are certainly not at full employment. But I don't think the agreement necessarily light a fire under our industry to be more creative, be more innovative. That's why I said I'm not 100 percent sure we're going to see a whole lot of change, and I don't mean that in a negative. I think I actually mean that positively because our industry been so integrated, or our three economies have been integrated for so long. There's nothing wrong with status quo.