MSCI asks Trump administration to modernize NAFTA without endangering its successes

In written testimony on NAFTA renegotiation, the Metals Service Center Institute (MSCI), Rolling Meadows, Ill., explained how uniquely successful the pact has been for North American manufacturing and urged the Trump administration to upgrade, but not endanger, the more than $1 trillion annual trading relationship that NAFTA has established among the U.S., 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/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.”

This testimony 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, 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 of these intermediate goods has “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.

The testimony also outlined several ways to modernize and improve NAFTA:Ensure stronger and more transparent rules that continue to level the North American trade playing field.

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.”