American Chemical Associations Comment on NAFTA
On 1st March, 2017, the North American chemical industry, represented by the American Chemistry Council (ACC), Chemistry Industry Association of Canada (CIAC), and the Mexican Chemical Industry National Association (ANIQ), released a joint statement outlining the chemical industry’s priorities for a potential renegotiation of the North American Free Trade Agreement (NAFTA). As the Trump administration appears poised to move ahead with renegotiating NAFTA, the leading chemical industry associations in the region defend NAFTA as positive while saying they were open to its “modernization.”
“Over the past two decades, the North American Free Trade Agreement has provided enormous benefit for the chemical sectors in Canada, Mexico and the United States. NAFTA has facilitated expanded economic growth, job creation, and enhanced North American competitiveness in the global marketplace. Since NAFTA entered into force, trade in chemicals between NAFTA countries has more than tripled, from $20 billion in 1994 to $63 billion in 2014", the statement says. "The interconnectivity between the three NAFTA economies has not only lowered the cost of chemical production, it has also strengthened the sector’s relevance in the region’s overall manufacturing economy."
The three associations stress that the chemical industry’s oversized share of economic activity in North America is a direct outcome of NAFTA’s effectiveness in reducing barriers to trade. However, they admit that a modernized NAFTA should facilitate digital trade, especially by establishing strong protections for cross border data flows, which is an essential element of global value chains. "In addition to streamlining burdensome customs procedures and upgrading infrastructure and transportation logistics, the North American chemical industry, represented by CIAC, ANIQ, and ACC, will advocate for a modernized NAFTA to include enhanced regulatory cooperation commitments from all three jurisdictions", the statement announces. While an updated NAFTA should also close inefficiencies on trade disciplines that are already codified in the agreement, including rules of origin and duty drawback the three chemical associations stress that all chemical products are traded duty free under NAFTA, and a modernized NAFTA should maintain this policy.
According to the joint statement, CIAC, ANIQ and ACC welcome opportunities to work with their respective governments to reexamine and strengthen NAFTA, with a focus on delivering enhanced benefits for the region’s businesses, workers and consumers.
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