North American steel producers have called on their respective governments to take urgent action to approve and implement the United States- Mexico-Canada Agreement (USMCA). The agreement replaces the 26-year-old North American Free Trade Agreement (NAFTA).
Under the USMCA agreement that was signed on Dec 10, the governments of the US, Canada, and Mexico agreed that 70pc of all steel and aluminum used in the production of the automobile must originate in North America.
A joint statement issued by the American Iron and Steel Institute, Canadian Steel Producers Association, Canacero, and Steel Manufacturers Association, announced that the agreement will strengthen the rules of origin and regional value content requirements for many steel-intensive products, including automobiles and key auto parts, welded pipe, and tube, among other goods made primarily from steel.
The deal also includes provisions to promote the cooperation and information sharing between the three countries to address circumvention and evasion of trade remedy orders.
Seventy-five percent of auto parts must be manufactured in the US, Mexico, or Canada under the USMCA, while Nafta only required 62.5pc for auto parts. The new agreement also states that between 40pc to 45pc of the vehicle must be produced by workers being paid at least $16 per hour.
The final USMCA agreement contains many protections promoting North American aluminum use, particularly in the automotive sector. Imports of aluminum sheet and plate from China into Mexico have increased by nearly 150pc in the past year and more than 1,700pc since 2014, the Aluminum Association said in a statement.