September 24, 2018
As the U.S. and Canada continue discussions on a modernized NAFTA, the Aluminium Association of Canada (AAC) is urging both governments to use this negotiation process to remove the Section 232 aluminium tariffs on Canada.
“We encourage Canada and the U.S. to reach a modernized NAFTA agreement that provides a full and permanent exemption,” says Jean Simard, president and CEO of AAC, “without quotas – for aluminium imports from Canada.”
And the AAC isn’t alone in this, as U.S. Commerce Secretary Wilbur Ross had similar comments in testimony to the U.S. Senate Finance Committee earlier in the year:
“Our objective is to have them revitalize NAFTA, a NAFTA that helps America. And as part of that, the 232 would logically go away, both as it relates to Canada and as to Mexico,” he said.
As a material of choice within the North American automotive and aerospace value chains, aluminium can only fully and competitively benefit America if it is freely and fairly traded, which is what a renewed trade agreement is all about. Canada’s aluminium supply should be considered as part of the US national security supply chain, as it has been since World War II.
“Section 232 is intended to be used to address threats to the United States’ national security,” says Simard. “The fact is aluminium from Canada has played a key role in U.S. defence efforts over the past century and would do so again if needed in the future, so it should not be subject to tariffs or quotas. The United States’ aluminium industry, labour movement and end users are united in the view that tariffs on Canadian aluminium should be lifted once the NAFTA negotiations are complete.”
The global aluminium industry has been facing structural problems over the last decade, resulting in a state of global overcapacity. Evidence points towards China for this imbalance in the aluminium sector as a result of its illegal subsidies to primary and semi-fabricated producers of aluminium.
To address the issue, a concerted multi-country approach including China is necessary, states the AAC.
The AAC adds that it will continue to work with the U.S. Aluminum Association as well as the European Aluminium Association towards “resolving this systemic situation in a global approach pursuant to the roadmap developed by the industry” at the Montreal Aluminium Summit held on June 3.