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NAFTA steel groups want higher auto value content in TPP deal

OTTAWA, Ont.–Three trade associations representing steel producers in the U.S., Canada and Mexico have sent a joint letter to their respective government trade agencies expressing concern that recent developments in the automotive portion of the Trans-Pacific Partnership (TPP) negotiations include proposals to weaken the “rules of origin” for the auto sector, which would adversely impact the steel industry.

The leaders of the American Iron and Steel Institute (AISI), CANACERO (Mexico), and the Canadian Steel Producers Association (CSPA), sent a letter to Ed Fast, Canadian Minister of International Trade of Canada; Ildefonso Guajardo Villarreal, Secretary of Economy of Mexico; and Mike Froman, United States Trade Representative for the U.S., urging “a TPP that will strengthen the competitiveness of North American steel producers by enabling continued growth for motor vehicle component and finished vehicle manufacturers.”

The groups wrote that, based on reports, proposed changes would lower regional value content (RVC) for auto parts and light-duty vehicles – currently set by NAFTA at 62.5% for autos, light-trucks, engines and transmissions, and 60% for other auto parts.

“Our members strongly oppose lowering such regional value content requirement,” the letter stated. “The TPP must not confer an advantage to producers whose primary supply chain is located outside the TPP region.”

“The auto supply chain is inextricably linked to the health of our countries’ respective steel industries and the prosperity of the North American auto and auto parts industries. The standards must not be reduced,” said Thomas J. Gibson, president and CEO of AISI.

We are very much opposed to any measures in the TPP agreement which would undermine the long-term global competitiveness of Canadian steel-makers, and their customers,” said Joseph Galimberti, President of the CSPA.

“Canacero is very concerned about the possible impact of relaxing in TPP the NAFTA regional value content for auto parts and light duty vehicles. This will imply lower employment generation,” said Salvador Quesada Salinas, Director General of Canacero.

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