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Comment: ‘Mexican steel market not closed to US steel'

Keywords: Tags  steel, trade, Mexico rebar, reinforcing bar, Canacero, Salvador Quesada Salinas, Philip Bell, Nafta suspension agreement

NEW YORK — Contrary to what Philip K. Bell, president of the Steel Manufacturers Association, charged in an opinion piece in AMM—that "Mexican and Turkish steel producers have been dumping increasing volumes of rebar into the U.S. market, causing severe injury to the U.S. rebar industry and its workers"—this is not the case.

Bell also claimed that "Mexico’s rebar market remains essentially closed" and that "trade between the U.S. and Mexico is virtually a one-way street."

While his piece is an attack on Mexican producers, he uses sleight of hand in conflating Turkey and Mexico. That allows him to cite "increasing volumes" of rebar exports.

The truth is that Mexican exports of rebar to the United States have been stable, representing only 4 percent of total U.S. consumption while domestic output represents 89 percent. Meanwhile, the U.S. enjoyed an overall trade surplus in steel with Mexico of $2.2 billion in 2013, up from $1.8 billion in 2011.

Clearly, the Mexican market is not closed to U.S. steel, nor specifically to rebar. Mexico has no tariffs and no quotas on rebar.

In the United States, by contrast, it is distressing to see protectionism on the rise. Since 2000, the United States has initiated nine anti-dumping cases against Mexican steel vs. just one case filed by Mexico. As for rebar, the United States imposes anti-dumping duties on seven countries—Belarus, China, Indonesia, Latvia, Moldova, Poland and Ukraine—and wants to boost that to nine. By contrast, Mexico has only one anti-dumping case involving rebar, against Brazil.

It is by choice that U.S. producers export relatively small quantities of rebar into Mexico. Why? Because the Mexican rebar industry is highly efficient—which might be the real reason U.S. mills have filed the anti-dumping case as well. There are American companies that produce rebar in Mexico rather than exporting from the United States. This is a strategic decision, not the result of being excluded from Mexican markets.

Mexican steel producers don’t seek special treatment or exceptions to the North American Free Trade Agreement (Nafta). To the contrary, we receive no subsidies from our government and we want to operate within this important free-trade agreement, which—like the leaders of our two countries—we deeply respect. We want to settle our differences through dialogue, negotiation and cooperation—rather than having to spend millions of dollars in legal bills defending anti-dumping actions.

Nafta itself recognized that there are ways to resolve trade disputes other than dropping the dumping bomb.

There is little doubt of the consequences of limiting competition in the United States through anti-dumping duties. The U.S. construction industry—and U.S. consumers—will suffer higher prices and thus lower demand for their products.

But there is a solution at hand in that "substitute system of rules" to which Nafta refers. A suspension agreement is the best way to resolve this dispute, to stimulate U.S. construction and to boost the economies of two great nations.

Salvador Quesada Salinas

Salvador Quesada Salinas is general director of the Mexican iron and steel industry chamber, Canacero.

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