Metals associations zero in on USMCA, trade issues

The American Iron and Steel Association (AISI) is among business organizations praising the United States-Mexico-Canada Agreement on trade (USMCA) as it draws nearer to replacing the existing North American Free Trade Agreement (NAFTA).

The USMCA was signed by President Trump on Jan. 29, after being ratified by both houses of Congress. Mexico’s government has already ratified the agreement, leaving Canada’s government to complete its ratification process.

Thomas J. Gibson, president and CEO of the AISI, has noted on behalf of that organization that nearly 90 percent of U.S. steel mill product exports go to Canada and Mexico. “USMCA will help create jobs and foster investment in manufacturing, including strengthening our steel industry supply chains with key customers by incentivizing the use of North American steel in manufactured goods,” states Gibson.

Adds Gibson, “In addition, USMCA promotes increased cooperation and information sharing among the North American government to address circumvention and evasion of trade remedy orders. This will enhance the ability of our three countries to continue to work together to address the surges of dumped and subsidized steel imports that have plagued the North American steel market. These are all tremendous positive developments for the steel industry.”

In December 2019, the AISI was joined by five other trade associations, including Mexico’s steel association CANACERO and the Canadian Steel Producers Association, in a joint statement calling the agreement “critical to strengthen the competitiveness of our industry facing the continuous challenges we face as they are, [including] the excess of global capacity and the slowdown in demand.”

The Arlington, Virginia-based Aluminum Association has similarly backed the USMCA, with its vice president for policy and international trade Lauren Wilk stating last December, “The aluminum industry in the United States relies on free, open and fair trade within North America, which has supported three consecutive years of historically high demand for aluminum within the region.”

Wilk did add as a condition that the Aluminum Association has “also emphasized the need for effective trade monitoring and enforcement, including the creation of formal aluminum import monitoring programs in the United States and Mexico.”

The Washington-based Institute of Scrap Recycling Industries (ISRI) has likewise applauded U.S. elected officials to work together to press for the USMCA’s passage. “We support the swift movement toward the passage of USMCA, as it supports more than 160,000 U.S. recycling industry jobs dependent on trade,” stated ISRI President Robin Wiener in December.

According to ISRI, the USMCA will benefit the recycling industry by supporting trade exceeding $7.7 billion in value; by maintaining tariff-free access for scrap commodities exported into Mexico from the U.S.; and by continuing “indirect recognition of ISRI Specifications as industry standards” in the recycling sector in North America.

Both the AISI and the Aluminum Association continue to point to the metals industry in nations outside of North America as requiring scrutiny from the U.S. government.

In mid-January, the Aluminum Association said it “applauds [an] agreement between the European Union, Japan and the United States to work toward the strengthening of the existing World Trade Organization’s (WTO) rules on industrial subsidies.”

The association has referred to a 2019 report by the Organization for Economic Cooperation and Development (OECD) that it says “highlights how non-market forces are responsible for some of the recent increases in aluminum smelting capacities, with detrimental impacts throughout the value chain.”

Continues the Aluminum Association, “The report indicates that global aluminum companies have received up to $70 billion in different forms of support over the 2013-2017 period, [and] notably, 85 percent of the documented subsidies went to just five Chinese firms.”

The AISI sees overcapacity in China that is likewise affecting steelmaking profitability in all three North American nations. It has urged the U.S. government to “press China and other nations to eliminate their steel overcapacity and to end all subsidies and other market-distorting policies that promote steel overcapacity.”