1 July will go down in history as the day when the much-discussed USMCA went into effect. It is for those who have been living in a cave, the agreement between the USA, Mexico and Canada that supersedes NAFTA, the North American Free Trade Agreement, which came into force back in the early nineties. Some people refer to the USMCA as NAFTA 2.0.
Commenting on the arrival of the USMCA, Philip K Bell, president of the Steel Manufacturers Association (SMA) commented: “Today marks the formalisation and beginning of a historic North American trade agreement that promotes free and fair trade and will benefit 21st Century steelmakers. The USMCA contains significant improvements and modernised approaches to rules of origin, automotive content requirements and labour protections for North American Workers. These and other provisions represent the culmination of efforts to modernise the 25-year-old NAFTA and will help create jobs and expand market access for steel producers in the region,” said Bell.
He added that “the SMA would like to applaud Ambassador Lighthizer and his team, as well as, the leadership of Canada and Mexico for reaching this landmark agreement.”
Canada and Mexico are the largest steel export markets for domestic steel makers with almost 90 percent of steel exports going to these two countries.
The American Iron and Steel Institute's interim president and CEO Kevin Dempsey commented: “Today’s entry into force of the USMCA represents a significant achievement by the United States, Canada and Mexico that will benefit the North American steel industry and its customers throughout the region. For US producers of steel, Canada and Mexico are our two most important export markets, together accounting for nearly 90% of all US steel mill exports. By incentivising the use of North American steel through its enhanced rules of origin, this agreement will help keep manufacturing supply chains strong for goods made primarily from steel. And the USMCA will promote increased co-operation among the three North American governments to address unfair trade practices such as transshipment and the circumvention and evasion of trade remedy orders."
According to Demsey, 'this important trade agreement will help bolster demand for steel throughout North America'. He said that steel producers are prepared to supply the steel their auto and other customers need to meet the new regional value content requirements of the USMCA.