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US must approach trade pacts with caution: execs

Keywords: Tags  steel, trade, TPP, Japan, China, Nucor, AISI, MSCI John Ferriola

COLORADO SPRINGS, Colo. — The U.S. steel industry could feel the effects of two major trade deals being negotiated by the government if certain provisions are not properly examined, according to participants at the American Iron and Steel Institute’s general meeting.

Trade has been an ongoing issue for steel interests, particularly as some say that while U.S. borders remain relatively open, many countries have restrictions on either imports or exports of steel that cause an uneven playing field. Such restrictions, combined with government-backed industries, or state-owned enterprises, put U.S. steelmakers at a disadvantage, some say (, May 1).

For example, trade experts say that a successful negotiation of the Trans-Pacific Partnership (TPP)—a proposed trade pact between the United States and Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam—could ultimately create a “gold standard” for trade transparency with China.

Japan recently expressed interest in joining the pact, which has made some steel industry participants uneasy.

“Japan is also being allowed into the Trans-Pacific Partnership’s ... trade talks despite the historically closed nature of the Japanese auto market and Japan’s recent actions to substantially weaken its currency,” John J. Ferriola, president and chief executive officer of Charlotte, N.C.-based Nucor Corp., said during a news conference at AISI’s 121st annual general meeting in Colorado Springs, co-hosted by the Metals Service Center Institute (MSCI).

The United States is also in separate negotiations with the European Union on a trade pact. While AISI president and chief executive officer Thomas Gibson said there are no steel tariffs between the two parties, a main concern is regulatory harmony.

“For an automobile produced in the United States to be exported to Europe, we have to have regulations in both (places) that are equivalent, and that would be a good thing for the U.S. automakers that desire to ship to Europe,” he said.
“There’s an issue in Europe right now with some of the regulatory policies they’ve adopted ... (and) if regulatory harmonization means adoption of some European-style regulations in ... how they regulate factories and sources of emissions, that can be a real problem.

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