Canadian Manufacturing

Steel producers urge TPP negotiators to maintain regional content rules for autos

Weakening regulations would 'adversely impact the steel industry,' groups say

OTTAWA—The trade associations representing steel producers in the U.S., Canada and Mexico are urging Trans-Pacific Partnership negotiators to put the brakes on any deal that weakens “rules of origin,” also known as regional content rules, for the auto sector.

The organizations sent a joint letter to their respective government trade agencies expressing concern that changes to current rules, which were put in place under NAFTA, would “adversely impact the steel industry.”

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

The rules currently require cars, light trucks, engines and transmissions to meet 62.5 per cent regional content to qualify under NAFTA, while other auto parts must meet a 60 per cent threshold. Reports says changes to the requirements, lowing vehicle content regulations to 45 per cent and parts to 30 per cent are currently under discussion.

“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,” Joseph Galimberti, president of the Canadian Steel Producers Association, said.

“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,” president and CEO of American Iron and Steel Institute, Thomas J. Gibson, added.

TPP negotiators from Canada, the U.S., Mexico and Japan are meeting this week prior to a potential meeting of all participating countries later this month.

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