SMA, MSCI: USMCA vital to North America as long as rules followed

Written by Ethan Bernard

The USMCA is an important trade agreement, as long as the member countries honor its requirements. These were the sentiments echoed by top officials of the Steel Manufacturers Association (SMA) and the Metals Service Center Institute (MSCI) during a press conference at their annual meeting last week in Scottsdale, Ariz.

“We think the USMCA is a landmark piece of legislation. I think it serves as a template for how other free trade agreements can work,” said Philip K. Bell, president of SMA.

“And I am extremely hopeful that all the parties that are involved in USMCA—Canada, Mexico and the US—continue to live up to the spirit of it and continue to do what they can to serve as a united front against transshipment, unfairly traded imports, and global excess steel capacity,” he added.

Recall that the US-Mexico-Canada (USMCA) trade agreement of 2019 removed Section 232 tariffs from Canada and Mexico. 

MSCI operates across borders

MSCI President and CEO Bob Weidner noted that MSCI members include service centers in both the US and Canada.

“So, we’ve been very supportive of pro-North American—Canada, US, and Mexican—trade policies,” Weidner said. “And the connectivity that exists. We have members moving product back and forth across the borders.”

Still, he said he’s concerned with non-market economies that could be circumventing and breaking trade rules by bringing products in through Canada or through Mexico.

MSCI Chairman John G. Reid echoed this with his unique point of view. He is also director, president, and CEO of Mississauga, Ontario-based metals distributor Russel Metals, which itself operates on both sides of the Canada-US border.

He said the agreement is definitely a benefit to its North American members, as long as everyone follows the rules.

“A strong North American economy governed under these rules really benefits everyone in manufacturing,” Reid said.

Likewise, Weidner underlined that a “healthy domestic source of supply” is needed, referring to all of North America, “but equally as important is a healthy domestic source of demand, because without demand there are no orders.”

Actions to be taken

Bell pointed out that for Mexico to live up to the spirit of the USMCA, two things must be true: “You cannot be a haven for transshipment. And also, you yourself cannot be engaging in import surges of certain products.”

Tensions have escalated as US industry and politicians have lamented a “surge” of steel imports from Mexico.

The “Stop Mexico’s Steel Surge Act,” introduced into both Houses of Congress in March, seeks to reimpose Section 232 tariffs. However, Mexico has threatened to retaliate if such measures go through.

Bell stressed that the USMCA region needs a melt-and-pour standard, “that is steel that’s traded between these three countries … needs to be melted and poured in the region.”

Bell also said there needs to be more transparency and strengthening of the import monitoring systems with Mexico to address allegations of transshipment.

“And we’ve been negotiating this for a long time,” Bell added. “I think we’re making steady progress, but we need to make more, and we need to make it faster.”

Ethan Bernard

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