Intra-region steel exports would increase with the new rules of origin of the Treaty between Mexico, United States and Canada (USMCA).
In auto production, the USMCA states that 70% of steel and aluminum must be from the North American region.
Additionally, the following so-called “essential” auto parts must meet 75% of VCR on average (value): engines, chassis & body, transmission case, axles, suspension, steering system and batteries.
For a brighter horizon, the governments of the three countries postponed for 10 years the discussion on the proposal that 70% of aluminum in cars be melted in the region. Likewise, they negotiated a transition period of seven years so that 70% of the steel in cars is found in the region.
In a joint statement, the largest private organizations in the North American steel industry welcomed the entry into force of the USMCA.
«This Agreement will strengthen the competitiveness of its three trading partners and help the development and competitiveness of the region’s advanced manufacturing industry, particularly that of steel,» they said.
Steel and regulations
According to the organizations, the USMCA will benefit steel producers in the North American region and all related sectors by strengthening existing integrated value chains, and by improving the original terms of the North American Free Trade Agreement ( NAFTA).
«This will be achieved through the entry into force of stricter Rules of Origin and better Regional Content requirements,» they added.
The Treaty also includes new provisions that will allow for greater cooperation, transparency and information exchange between the three governments, with the aim of stopping triangulation and evasion of trade remedies measures in the steel sector.
«This growing cooperation will strengthen the competitiveness of the steel industry in the North American region in the face of the challenges it faces caused by global overcapacity and falling global demand for steel; especially as the industry works to recover from the effects of the Covid-19 pandemic, ”they said.
Exports
Mexico gained market share in the U.S. iron and steel market in 2019, even as its sales to that market declined.
Mexican exports of iron and steel foundry manufactures to the United States totaled $ 5,206 million last year, down 0.3% year-on-year.
Within that basket of goods are, for example, exports of tubes, screws, springs, bridges, towers, stoves, cisterns and wire cloth.
In a second classification, foundry, iron and steel, Mexican exports to the United States were for 2,188 million dollars, which represented a 5% drop year-over-year.
This set includes, among others, exports of iron and steel bars and profiles, intermediate products, waste, rolled products and iron and steel in its primary forms.
As a result, Mexico’s market share in imports from the United States went from 7.4 to 8.9% from 2018 to 2019 in the case of iron and steel foundry manufactures, and from 12.1 to 12.7% (a record) in foundry. , iron and steel, comparing those same years.
