Posted on 17 Oct 2019
Congressional passage of the United States-Mexico-Canada trade Agreement (USMCA) remains the highest priority for US steelmakers, but the impeachment inquiry of President Donald Trump has emerged as an uncontrollable element hanging over the legislative process.
“Impeachment is another challenge that’s going to have to be dealt with,” Thomas Gibson, president and CEO of the Washington-based American Iron and Steel Institute, said earlier this week on the sidelines of the World Steel Association general assembly meeting in Monterrey, Mexico.
“Will the administration and the House Democrats be able to move on almost any legislation in the face of an active impeachment inquiry? That’s an open question,” he told S&P Global Platts.
The AISI, which serves as the voice of the North American steel industry in the public policy arena, is comprised of 18 member companies, including integrated and electric furnace steelmakers.
“For us, when we look at the improvements that we got in the USMCA on rules of origin, on enforceable currency disciplines for the first time, on improved enforcement, it’s a clear win for our industry and we very much want to see the USMCA approved this year,” Gibson said.
Nonetheless, he acknowledges that “an impeachment is not a controllable thing for us and we’re going to have to see if the administration and the House Democrats are going to be able to work cooperatively.”
However, Gibson also maintains that the biggest thing USMCA has going for it is the strong relationship between the US Trade Representative, Robert Lighthizer, and the House Democrats. “I think there’s a lot of respect and trust there and I have a lot of confidence in Bob,” Gibson said.
“But the macro-political questions right now are so large it’s going to be a challenge, and they’re going to have to figure out how they separate the impeachment process from the legislative process, and most of the political calculation right now would seem to be with the House Democrats on that.”
According to an initial USTR report, new investment attributable to the USMCA by automakers and battery suppliers is expected to total about $34 billion over five years.
“The automotive rules of origin (ROO) in the North American Free Trade Agreement are outdated, contain significant loopholes, and have encouraged the outsourcing of US jobs,” the report stated. “The new automotive ROO in the [USMCA], by contrast, are designed to incentivize investment, production and employment in the US automotive sector.”
