Washington — If U.S. manufacturers had their way, the renegotiation of the NAFTA trade pact with Mexico and Canada would be a limited affair, and would reject controversial measures President Trump has floated like border taxes.
Manufacturing groups, including for plastics, came out in force to several days of U.S. government hearings beginning June 27, urging caution and taking a pro-NAFTA line as the Trump administration starts work on renegotiating the North American Free Trade Agreement.
Not everyone in the plastics industry was on the pro-NAFTA page. The CEO of a small plastics processing company in Illinois, for example, complained in written comments about "American manufacturing businesses that were decimated due to NAFTA."
But, for the most part, industry came before the hearing called by the U.S. Trade Representative to argue in favor of NAFTA, which was signed by the three nations in 1994.
The Washington-based American Chemistry Council, for example, said NAFTA and free trade deals in general are key for the plastics industry to fully realize export benefits from the shale gas boom.
In testimony June 28, an ACC executive said NAFTA has created a deep and cost effective economic integration of supply chains between the three countries — trade within the same or closely related companies makes up 50 percent of U.S. chemical exports and 70 percent of chemical imports.
"Imposing tariffs or other trade barriers on trade in chemicals would be like putting a wall in the middle of a factory," said Greg Skelton, senior director of regulatory and technical affairs with ACC.
Likewise, the Plastics Industry Association said in written comments that its member companies want to keep the agreement in place, but they did say they are looking for help in more technical areas.
"In a survey of our members, members indicated their support for the continuation of NAFTA, however many shared their concerns about non-tariff barriers and technical barriers to trade," according to comments from Perc Pineda, the association's chief economist.
The Washington-based association said, for example, that its members noted that each of the three countries have different machinery safety codes. That leads to confusion in compliance.
And it said its members reported "no transparency in the frequent rulemakings made by the Mexican and Canadian governments on importing requirements."
The association said the U.S. plastics industry had a trade surplus of $12.26 billion with Mexico last year, and a $1.15 billion surplus with Canada.
It also argued that while plastics trade with Mexico has been favorable, some parts of the relationship with Canada should be improved: "The NAFTA modernization negotiations must address the seemingly inaccessible parts of the Canadian market for some plastic products."