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MSCI asks Trump administration to modernize NAFTA without endangering its successes

June 12, 2017 - In written testimony on NAFTA renegotiation, the Metals Service Center Institute (MSCI) explained how uniquely successful the pact has been for North American manufacturing and urged the Trump administration to upgrade, but not endanger, the trillion dollar-plus annual trading relationship that NAFTA has established between the United States, Canada and Mexico. The testimony was submitted to the Office of the U.S. Trade Representative.

“NAFTA can be improved, there is no doubt,” said MSCI President and CEO M. Robert Weidner, III, “But trade with Canada and Mexico is not why U.S. steel and aluminum shipments have not recovered to their pre-Great Recession peak. The blame for that lies with global state-subsidized overcapacity and other unfair trade practices by bad actors like China. The Trump administration must be fully aware of this trade dynamic so that it can work collaboratively with Canadian and Mexican officials to improve NAFTA for the entire North American industrial metals supply chain.” 

Today’s submission is in line with MSCI’s strong defense of its NAFTA trading partners in comments filed with the U.S. Department of Commerce’s Section 232 steel investigation into whether the present state of steel imports endangers national security. In those comments, available here, MSCI requested that metal imports from Canada and Mexico be expressly excluded from any trade penalties resulting from the 232 investigation, provided there is no evidence that China or other countries are taking advantage of this policy to circumvent trade penalties rightfully imposed on their products.

MSCI’s NAFTA submission noted that, in 2015, about 48 percent of U.S. manufactured goods imports from Canada and 40 percent of U.S. manufactured goods imports from Mexico were categorized as intermediate goods, parts and components. Trade in these intermediate goods “have helped manufacturers in the United States improve their global competitiveness and grow domestic manufacturing with end products sold both in the United States and overseas,” the testimony said.

MSCI’s testimony also outlined several ways to modernize and improve NAFTA, including:

  • Ensuring stronger and more transparent rules that continue to level the North American trade playing field;
  • Easing border crossing regulations, wait times, and other restrictions;
  • Harnessing the digital revolution to allow for faster, easier, less burdensome and safer cross-border commerce;
  • Creating even stronger, more efficient dispute settlement procedures; and
  • Renewing the commitment to work collaboratively, while strengthening the rules and mechanisms to hold accountable bad actors that seek to circumvent trade laws.

The testimony concluded, “Addressing and enhancing efficiency at U.S., Canadian and Mexican borders will result in a more competitive industrial metals supply chain and increased global competitiveness for U.S. manufacturers which will result in economic growth and U.S. jobs.”

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