RWR 2019: USMCA changes viewed as positive, ratification pending

Tuesday, 22 January 2019 01:34:49 (GMT+3)   |   San Diego
       

During the 10th annual SteelOrbis Rebar & Wire Rod conference held Las Vegas, NV, Tom Gibson, President and CEO of the American Iron and Steel Institute (AISI) listed some of the positive changes within the updated North American Free Trade Agreement (NAFTA), now known as the United States Mexico Canada Agreement (USMCA).

Gibson noted that the USMCA offers updated benefits to the United States including a better dispute resolutions format, higher US components on auto imports, higher wage benefits to steel workers in Mexico, and an unprecedented currency manipulation segment. He elaborated that this was the first international agreement with the clause, adding it may lead the way to its inclusion in future international agreements, as currency manipulation has added to the unfair trade practices that have hurt the US economy.

John D. Foster, President of Kurt Orban Partners and Chairman of the American Institute for International Steel (AIIS) noted that while the agreement was signed without an exemption to Section 232 for Mexico and Canada, no member country had yet ratified it and it may be delayed in each country’s legislative process. Foster added that in the US Democrats in Congress are in charge of the ratification process for USMCA, but they do not yet have a unified position on the agreement.

Chris Casey, President of the Independent Steel Alliance (ISA) commented that Mexico and Canada are important allies and the presence of the Section 232 tariffs may delay its ratification which in turn adds uncertainty to the markets, especially, given the rhetoric of the Trump administration that the US is willing to walk away from such an important agreement. Additionally, Casey added that the uncertainty has forced Mexico and the Canada to seek new trade agreements including the EU and the Pacific Alliance.

Mexico and Canada have also discussed a bilateral agreement that could omit the US.

 


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