North American steel groups want stronger NAFTA rules of origin

6 June 2017

Steel trade groups representing Canada, the United States and Mexico said that any upgrade to the North American Free Trade Agreement (NAFTA) should require that manufacturers use more steel produced in the region in their products.

The rules of origin, which stipulate that products must meet minimum NAFTA-wide content requirements to be tariff-free, are seen as a sensitive area of discussion once negotiations to revamp the trilateral treaty kick off in August.

"The three countries should agree to updated rules of origin and regional value content requirements that incentivize investment and job growth in the region," lobby groups representing the North American steel industry said in a joint letter.

"In particular, rules of origin and regional value content provisions for steel-containing goods should ensure that North American manufactured goods are built with North American steel," said the letter.

Under rules of origin, manufacturers must obtain a minimum percentage of components for their products from the three NAFTA members.

Mexican officials have said that stricter rules of origin in some industries could be one way for companies in North America to use more regional content, supporting President Donald Trump's plan to create more U.S. manufacturing jobs.

Mexico sends the vast majority of its exports north to the United States, and local officials view the trade agreement as a lynchpin of their economy.