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November 13, 2018

US reaches new deal to replace NAFTA

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The U.S., Canada and Mexico reached an agreement late on Sept. 30 to update the North American Free Trade Agreement (NAFTA). NAFTA was first enacted in 1994 as a way to govern more than $1.2 trillion worth of trade among the U.S., Canada and Mexico. Trump’s administration had been working to renegotiate NAFTA with the governments of Canada and Mexico.

As a result of the agreement, the new deal will be known as the United States-Mexico-Canada Agreement (USMCA), according to a news report in the Washington Post. Most of the key provisions of the deal won’t go into effect until 2020 since leaders from all three countries have to sign it and then Congress and legislatures in Canada and Mexico have to approve it, the Washington Post reports.

A number of industry associations responded to share what this new deal means for the recycling industry.

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute (AISI), Washington, offered his statement in reaction to the announcement of USMCA.

“We appreciate the administration’s hard work to reach this trade agreement between the U.S., Canada and Mexico—especially regarding measures that ensure North American steel continues to be used in automobile production,” Gibson says. “We are pleased that the agreement is trilateral, as the relationship between our three countries has been extremely beneficial for the steel industry and resulted in robust trade and investment in the region over the past 25 years. This new agreement is significant, as it will keep our manufacturing supply chains strong throughout North America.”

Regarding customs clearances, the Institute of Scrap Recycling Industries (ISRI), Washington, says it is hopeful the USMCA’s more detailed guidelines for the three governments will allow for improved border crossings, including information sharing, law enforcement collaboration and procedures for adjudicating disputes. ISRI notes that the USMCA enhances collaboration between the government to prevent illegal transshipment by outside parties.

ISRI adds that USMCA does not mention specific standards or standards bodies as preferred guidelines, so the association is “hopeful that ISRI Specifications will be acknowledged as the guidelines for scrap.”

In USMCA’s Rules of Origin, ISRI notes that waste and scrap “maintain the same origin classification as in the NAFTA in that scrap materials are considered ‘originating’ in North America if processed in one of three countries … as well as derived from used goods collected in one of the three countries for purposes of extracting raw materials.” The association notes that this aspect of USMCA is beneficial for manufacturing customers that produce goods from scrap commodities processed in North America since they will be able to include scrap as part of the new 60 percent transaction value (or 50 percent of cost) cumulation threshold for duty-free trade within North America.

The USMCA deal did not bring about the removal of 232 U.S. tariffs on steel or aluminum from Canada or Mexico. ISRI says reports indicated that those negotiations “will happen separately but no timeline was given.”

Additionally, the Arlington, Virginia-based Aluminum Association released a statement expressing its disappointment that the latest agreement didn’t include a Section 232 tariff resolution.

“The Aluminum Association is disappointed that the Section 232 aluminum tariffs were not addressed as a part of the United States-Mexico-Canada Agreement (USMCA),” says Heidi Brock, president and CEO of the association. “Now is the time for the United States to work with Canada and Mexico to provide a full exemption—without quotas—for aluminum imports from those countries. This should occur as soon as possible, and certainly before the final agreement is signed.”

Brock adds that integrated North American supply chains are a main reason the aluminum industry has been able to meet growing demand every year. However, she says, as the industry is in a deficit market, additional barriers in the supply chain, such as the tariffs, will threaten growth.

“The current Section 232 tariffs are hurting U.S. aluminum companies, making them less competitive on the world stage,” Brock says. “Ninety-seven percent of domestic aluminum industry jobs are in mid- and downstream production and processing. By artificially raising input prices and constraining metal supply, tariffs and quotas risk harming demand, growth and investment in the United States. We will continue to review the specifics of the agreement and work towards tariff- and quota-free trade of aluminum with our North American trading partners.”

OSHA updates National Emphasis Program on trenching and excavation safety

The U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) has updated the National Emphasis Program (NEP) on preventing trenching and excavation collapses in response to a recent spike in trenching fatalities.

OSHA’s NEP will increase education and enforcement efforts while its inspectors record trenching and excavation inspections in a national reporting system. Additionally, each area OSHA office will develop outreach programs as part of the initiatives.

“Removing workers from, and helping workers identify, trenching hazards is critical,” says OSHA Deputy Assistant Secretary of Labor for Occupational Safety and Health Loren Sweatt. “OSHA will concentrate the full force of enforcement and compliance assistance resources to help ensure that employers are addressing these serious hazards.”

The emphasis program began Oct. 1 and will kick off a three-month period of education and prevention outreach. During this period, OSHA will continue to respond to complaints, referrals, hospitalizations and fatalities. Enforcement activities will begin after the outreach period and remain in effect until cancellation. OSHA-approved state plans are expected to have enforcement procedures that are at least as effective as those in this instruction.

OSHA has also developed a series of compliance assistance resources to help workers avoid trenching and excavation hazards. The trenching and excavation webpage on OSHA’s website provides information on trenching hazards and solutions that workers can use to stay safe on the job.