Articles related to NAFTA
Meeting in Mexico City on October 20, leaders of the chemistry industry associations in Mexico, the United States and Canada expressed concern with the status and outlook for negotiations underway to modernize the North American Free Trade Agreement (NAFTA).
Hosted by the Asociación Nacional de la Industria Química (ANIQ), Cal Dooley, President and CEO American Chemistry Council (ACC), Miguel Benedetto, Director General ANIQ, and Bob Masterson, Chemistry Industry Association of Canada (CIAC) President and CEO were joined by Larry Rubin, President of the American Community in Mexico, on a panel session organized by ANIQ as part of its Chemistry Industry National Forum XLIX.
All panelists highlighted the importance of free and fair trade to the industry and noted the significant increases in chemistry trade across the three countries since the introduction of NAFTA twenty-three years ago. Participants also highlighted the positive, consensus contributions made by all three industry associations towards improvements in a modernized NAFTA in areas of chemistry rules of origin, movement of professionals, digital commerce, and regulatory cooperation.
Despite the positive contributions, all participants expressed concern about the status of negotiations and could offer little certainty or clarification with respect to the pathway to successful negotiating outcomes.
“For CIAC, and more broadly the chemistry sector in North America, we view these negotiations as an opportunity to extend the progress that has been made over the past twenty-three years,” Masterson said. “Unfortunately, however, the current status is highly uncertain and there does not appear to be a Plan B in place. Each country shares responsibilities in terms of tabling positions they know full well are non-starters for their counterparts,” Masterson added.
On September 25, CIAC participated in a NAFTA panel discussion in Ottawa hosted by iPolitics. The discussion focused on the North American chemistry sector’s role in the current NAFTA negotiations and included David Podruzny, CIAC Vice-President Business and Economics, Greg Skelton, American Chemistry Council (ACC) Senior Director for Technical Affairs and Guillermo Miller, International Affairs & Economics Vice President, of the Asociación Nacional de la Industria Química (ANIQ) in Mexico.
The hour-long discussion focused on the joint statement released by the three associations earlier this year outlining the benefits the North American chemistry industry has delivered through NAFTA over the past 23 years, and the consensus advice they provided to NAFTA negotiators in early September on the important issues of Rules of Origin and Regulatory Cooperation under a modernized NAFTA.
“The sector is growing globally, so there’s an opportunity for the three countries to be part of that growth, take advantage of it and take advantage of market access,” Podruzny said.
Additionally, Podruzny highlighted the benefits of a robust chemistry sector to North America’s economy. “Chemistry is larger in trade than motor vehicles. It also touches most of the other sectors of the economy. . . more than 95 per cent,” he said.
Skelton emphasized a need to keep certain parts of NAFTA intact – including keeping tariff-free trade on chemicals in North America. However, he also stressed the importance of modifying the 23-year-old agreement to meet modern needs, since trade has changed over the past two decades.
Skelton said there is currently a lack of coordinated regulation across North American chemistry industries, which has led to inadvertent trade barriers that do nothing to enhance human health or environmental protections.
“The chemical industry is a highly regulated sector around the world, and it needs to be,” Skelton said.
A modernized NAFTA could address regulatory issues which currently present implicit barriers to trade between the three countries.
Additionally, Miller argued that the key priorities for a modernized NAFTA are to increase trade and decrease the overhead costs of trade. He emphasized that a modernized NAFTA should allow the North American chemistry sector to compete more efficiently in the global chemistry industry.
On September 7, the national associations representing the chemistry industry in North America provided their respective North America Free Trade Agreement (NAFTA) negotiating teams with comprehensive advice in two joint statements that will contribute to improved outcomes for all three partners to NAFTA.
Following on the release of a joint statement earlier this year outlining the benefits the North American chemistry industry has delivered through NAFTA over the past 23 years, the Chemistry Industry Association of Canada (CIAC), the American Chemistry Council (ACC) and the Asociación Nacional de la Industria Química (ANIQ) in Mexico, have now provided consensus advice on the important negotiating issues of Rules of Origin and Regulatory Cooperation under a modernized NAFTA.
“Implementation of these agreed positions will encourage regulatory harmonization capable of protecting people and the environment in all three countries while also spurring innovation and improving our overall regional position in the highly competitive global chemistry sector,” says Bob Masterson, CIAC’s President and CEO.
Masterson added, “A great amount of effort by our respective associations and the industry in all three countries has gone into landing on these consensus positions. We are leading the way in demonstrating that there are indeed opportunities to modernize NAFTA while delivering benefits to all three partners to the agreement.”
Since entering into force in 1994, NAFTA has facilitated economic growth, job creation, and enhanced co-operation in the North American chemistry industry. Over the past 23 years, trade in chemicals between NAFTA countries has more than tripled, from $20 billion in 1994 to $63 billion in 2014.
Representatives from the CIAC, ACC and ANIQ will be meeting with the NAFTA negotiating teams on the margins of the upcoming third round of negotiations, to be held in Ottawa, Canada in late September.
On July 11, CIAC submitted comments to Global Affairs Canada on the renegotiation of the North American Free Trade Agreement (NAFTA), an agreement that has provided enormous benefit to the chemistry industries in Canada, Mexico and the United States.
CAIC sees modernization of NAFTA as an opportunity to address inefficiencies and upgrade the agreement to reflect technological advances and incorporate procedures adopted or proposed since the agreement came into force in 1994.
“Our overriding objective is for a modernized NAFTA to result in efficiencies that deepen economic integration, and make North America’s co-produced products and services more globally competitive,” says Bob Masterson, CIAC President and CEO.
Modernizing NAFTA should include facilitating digital trade, codifying processes on regulatory coherence and simplification, and enhancing trade and customs facilitation. Several key messages in the submission include:
- Maintaining free trade (no tariffs).
- Simplified, clear and predictable rules of origin.
- Harmonized, simplistic, transparent and streamlined border measures.
- Strengthen and align the risk- and science-based approach to chemical regulation adopted in Canada and the U.S.
You can read the submission here: http://www.canadianchemistry.ca/library/uploads/CIAC_NAFTA_Submission-Final.pdf
On June 26, Debbie Stephens, President of Dow Canada ULC and Chair of the Chemistry Industry Association’s (CIAC) Board of Directors, along with Greg Moffatt, CIAC’s Director Government and Stakeholder Relations – Western Canada, attended a Manufacturing North American Free Trade Agreement (NAFTA) Roundtable in Calgary.
Alberta Economic Development and Trade hosted the meeting to hear the specific interests of the manufacturing sector in the province to inform their participation in the NAFTA negotiations that will begin later this year. The meeting was attended by representatives from Global Affairs Canada and Alberta’s manufacturing sector.
CIAC shared the chemical manufacturing sector’s interests in modernizing NAFTA. Our sector is the largest manufacturing exporter in Alberta, and across North America represents a highly integrated value chain with the U.S. and Mexico. This integration has generated economic benefits for all three countries and is reflected in the strong alignment amongst CIAC, the American Chemistry Council (ACC), and the Mexican Chemical Industry National Association (ANIQ) in their NAFTA advocacy to their respective governments.
Specifically, CIAC is advocating for:
- Maintaining current tariff-free trade for qualified products;
- Improvements to rule of origin requirement;
- Enhanced customs and trade facilitation;
- Digital trade, and regulatory harmonization and cooperation; and
CIAC will be making a submission to Global Affairs Canada as part of their public consultations on the renegotiation of the NAFTA with the U.S. and Mexico this week. CIAC will also continue to work with the ACC and ANIQ (a joint statement issued by all three associations on our common NAFTA modernization goals can be found here).
On May 18th, David Podruzny, CIAC Vice-President, Business and Economics, appeared in front of the Standing Committee on Foreign Affairs and International Development to discuss the importance of trade to the Canadian chemistry sector.
Podruzny addressed several issues facing the sector in relation to U.S. trade, including competitiveness, lagging investment in the industry, and NAFTA negotiations.
More than 70 per cent of exports from the Canadian chemistry industry go directly to the U.S. and about two-thirds of all chemical imports in Canada come from there. “We can no longer afford to take for granted our competitive position and trade relationships vis-à-vis the United States,” Podruzny said.
CIAC believes Canada must be prepared to negotiate a modernized NAFTA agreement, which the U.S. is intent on renegotiating. NAFTA has facilitated the growth of complex supply chains, allowing products to cross the border multiple times during production, and it has helped lower the cost of chemical production and strengthened the role of the industry across North America.
Additionally, the new administration in Washington has made it clear they want to pursue a more competitive landscape for its manufacturing sector. In the last five years, Canada has only received about one per cent the value of U.S. investments.
“Absent a coordinated and appropriate response, Canada will be second in every investment decision in our sector,” Podruzny said. “If we are to retain and grow this valuable sector, which contributes to our quality of life and provides solutions to global challenges, we must respond – Canadian policy must be shaped to win, to make a difference.”
You can listen to the committee meeting here. Podruzny’s testimony starts at 9:59:49
May 16th, Bob Masterson, CIAC President and CEO, and David Podruzny, Vice-President Business and Economics, appeared in front of the Standing Committee on International Trade to discuss the importance of sound trade policies for the competitiveness of Canada’s chemistry industry.
During his opening remarks, Masterson conveyed three key messages:
- The global chemistry industry is a large, fast growing industry with deeply interconnected patterns of trade. Annual chemistry sales will likely exceed $6 trillion from 2020 onwards.
- Canada’s position within this highly integrated global sector is at an inflection point. The availability of abundant, low cost natural gas liquids arising from the shale gas phenomenon has resulted in over 300 global scale chemistry investments worth $250 billion in the United States, which could displace significant exports from Canada.
- There are opportunities to change the current pathway and allow Canada’s chemistry sector to flourish and make important contributions to the domestic economy and global environment. For Canada to seize these opportunities we need to: be prepared to negotiate a modernized NAFTA agreement; pay more attention to investment competitiveness; and consider market diversification, especially for Canada’s energy and manufacturing sectors.
When asked about NAFTA during the question period, Masterson explained that the negotiations should address:
- Improvements to rule of origin requirement
- Maintaining current tariff-free trade for qualified products
- Customs and trade facilitation
- Digital trade, and regulatory harmonization and cooperation
- Enhanced regulatory cooperation among all three jurisdictions
Masterson’s opening remarks can be seen below:
On May 5, CIAC hosted a roundtable with Ontario Premier Kathleen Wynne and representatives from the Sarnia-Lambton chemistry cluster at Lambton College to discuss the importance of the cluster to the local and the Ontario economy, the importance of unfettered access to the U.S. and global markets, as well as investment and growth opportunities to support the continued evolution of the cluster.
Ontario’s $22 billion chemistry sector is the Province’s third largest manufacturing sector. The chemistry industry is also Ontario’s second largest manufacturing exporter. In 2016, Ontario chemistry sector trade imports from the U.S. totalled $23 billion, while exports to the U.S. totalled $16.1 billion. The top Ontario-U.S. trade partners include Texas, Ohio, New Jersey, and Pennsylvania., among others.
“More than 70 per cent of all the chemistry we make in Ontario is exported to the United States. In short, nothing is more important to our sector’s economic well-being than maintaining free and open access to our US markets,” said Bob Masterson, President and CEO of CIAC. “Ontario’s engagement in the issue is an important complement to the efforts of the federal government in Ottawa.”
At the roundtable, Don Fusco, CIAC’s Government and Stakeholder Relations – Ontario, noted that there have been over $1 billion in chemistry sector investments in Ontario over the past five years and acknowledged the Province’s support through programs, including the Jobs and Prosperity Fund. Don emphasized that the industry is looking to continue to work with the Provincial officials and lever investment attraction programs to secure additional investments as our sector growth opportunities are aligned with the Province’s economic and innovation goals.
Participants from the chemistry industry included anchor members and key partners in the Sarnia Lambton cluster, demonstrating the strength, integration, collaboration and diversity of the cluster: ARLANXEO, BioAmber, Cabot Canada, Imperial Oil, NOVA Chemicals, Shell Canada, Lambton College and Bioindustrial Innovation Canada.
CIAC will continue to work with Ontario government officials to strengthen the Province’s competitiveness to achieve the shared objective of future investments and growth.