• Leadership Update

U.S., Canada, Mexico Reach New Deal; Mostly Status Quo for Recyclers

The leaders from the United States, Canada, and Mexico announced this week they reached a deal on a new “U.S. Mexico Canada Agreement” (USMCA) to replace the existing North American Free Trade Agreement (NAFTA).

Although some details still require additional negotiations, and the final agreement needs to go through a number of legally-required procedures in the United States (in addition to parliamentary ratification in all three countries), the governments are hailing a break-through in modernizing the 24-year-old NAFTA. For recyclers, there is mostly status quo, although ISRI expects that some of the provisions will make trade a little easier.

Specifically, the USMCA provides more detailed guidelines for the three governments to cooperate in ways to allow for improved border crossings while also doing more to prevent illegal transshipment by outside countries. Although ISRI Specifications are not specifically identified as a standard, the governments “recognize the important role that international standards, guides, and recommendations play” for “regulatory alignment” and trade, and thus, would accept ISRI Specs as the guidelines for scrap trade. For Rules of Origin, scrap processed in North America, whether from generation here or outside North America, can be considered as “originating” content by consumers producing goods for duty-free trade under the agreement.

However, no decision was made to remove the U.S. 232 tariffs on steel and aluminum from Canada and Mexico into the United States. Reports indicate negotiations will happen separately, but no timeline was given.

The agreement is expected to be signed in November, but this does not mean the agreement goes into effect. U.S. trade promotion authority requires several procedures, including public comment periods, and it is expected to face spirited debate before Congress votes. Only when all three parliaments ratify the agreement will it go into effect. We will keep members informed as timing for implementation becomes more certain.

You can read the full agreement or the ISRI Member Alert for more information. Please contact Adina Renee Adler with any questions.

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