U.S steel association urges better coordination under new NAFTA

13 June 2017

The top U.S. steelmakers association on Monday called for better coordination and enforcement of rules under a renegotiated North American Free Trade Agreement to guard against Mexico, the United States and Canada becoming a dumping ground for cheap steel from other countries.

In comments to the U.S. Trade Representative ahead of NAFTA negotiations in August, the head of the American Iron and Steel Institute (AISI), Thomas Gibson, urged updates to NAFTA's rules of origin - how much of a product is made in North American - new measures to curb steel dumped on the market by non-NAFTA countries, and steps to improve customs procedures.

"The American steel industry views NAFTA as a successful agreement but after 23 years, one that can also be modernized and strengthened," Gibson said in a letter to Edward Gresser, chairman of USTR's Trade Policy Staff Committee.

The U.S. Trade Representative office asked businesses and industry groups to submit recommendations this week ahead of the NAFTA talks. AISI members include ArcelorMittal USA, Nucor Corp , U.S. Steel and AK Steel Holding Corp.

Gibson also said "enforceable currency disciplines" should be added to the new NAFTA to avoid trade-distorting currency misalignments or competitive currency depreciation, a complaint often heard by U.S. manufacturers against such countries as China and Japan.

He said while Mexico and Canada did not manipulate their currencies, a currency clause would be a useful precedent for other trade agreements where it might be more relevant.

NAFTA should also help level the playing field for North American steel producers, which are disadvantaged by enterprises that are owned or financed by governments, Gibson added.

After calling NAFTA "the worst trade deal" ever during the presidential election campaign, U.S. President Donald Trump has since softened his stance toward the agreement between the United States, Canada and Mexico.

Instead of dismantling NAFTA, most U.S. industries and businesses have called for it to be updated and modernized. Like U.S. automakers, the U.S. steel industry has expressed concerns that changes could interfere with existing supply networks.

In other comments sent to USTR ahead of the NAFTA talks, the U.S. Chamber of Commerce called on the Trump administration to ensure that the negotiations "be conducted in a manner that does not put millions of American jobs at risk."

"The chamber supports this effort to modernize the NAFTA, taking into account technological, economic, and other changes in the U.S., North American, and global economies in recent years," the chamber's senior vice president for international policy, John Murphy, said.

Meanwhile, the National Foreign Trade Council said the talks should create more open markets and better rules, not new restrictions.