HOW NAFTA KEEPS ALUMINUM MOVING Platts Aluminum Symposium 2018 - - PowerPoint PPT Presentation

HOW NAFTA KEEPS ALUMINUM MOVING

January 15, 2017

Platts Aluminum Symposium 2018

Heidi Brock President & CEO The Aluminum Association

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WHO WE ARE

The Aluminum Association

• 85-year old trade association
• Represent $75B + U.S. aluminum industry
• Promote aluminum as most sustainable

material in today’s market

• 115 member companies
• Represent full aluminum value chain (primary,

recyclers, semi-fabricators, suppliers)

• Grow markets & achieve policy outcomes

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OUR TRADE PRINCIPLES

Rules-based Global Trading System

Goal Level the playing field for the full U.S. aluminum value chain to ensure robust, fair and rules-based trade of aluminum and aluminum products. Activities

• Encourage U.S. government to pursue tangible and enforceable commitments from China
• n overcapacity.
• Actively support rules-based trading system and free trade agreements that benefit U.S.

manufacturers and producers.

• Ensure strong enforcement of U.S. and global trade rules.

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NAFTA 2.0 MILESTONES

Quick Pace for Renegotiating Foundational Trade Agreement

2017

January January June May July August September NAFTA 2.0 Objectives Released October December Negotiations Round 1

United States

President Announces Renegotiation U.S. Midterm Elections

2018

USTR Hearing Negotiations Round 2

Mexico

Negotiations Round 3

Canada

Negotiations Round 4

United States

Negotiations Round 5

Mexico

November Intersessional

United States

Updated Objectives Released Negotiations Round 6

Canada

Target to End Negotiations February March April June May July August September October November Mexico Presidential Elections

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POSSIBLE OUTCOMES

Possible Path Forward on Negotiations

Quick Conclusion

• Breakthrough on roadblocks, with agreement on “modernized” provisions.
• Clear path for implementing bill to pass Congress, and businesses can make investments.

Keep Negotiating

• The parties stay at the negotiating table through Mexican and U.S. elections, and they find a compromise on controversial

issues.

• Long period of uncertainty, but the status quo is largely maintained.

Withdraw

• President Trump gives “six months’ notice” for U.S. withdrawal, and uncertainty undermines North American

competitiveness.

• Mexico and Canada walk away from the negotiations, and tariff rates snap back to pre-NAFTA.

73% 13% 14% 6% 68% 26% Ingot Scrap Semis Canada Mexico

1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

U.S. Imports from NAFTA Trading Partners

(Billions of Pounds)

Mexico Canada

14% 19% 68% 24% 12% 63% Ingot Scrap Semis Canada Mexico

+135% +246%

Volume Value

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NAFTA: KEY ALUMINUM GROWTH DRIVER

0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

U.S. Exports to NAFTA Trading Partners

(Billions of Pounds)

Canada Mexico

NAFTA → NAFTA → +93% +190%

Volume Value 7.4B lbs $2.2B $6.4B 3.8B lbs 3.2B lbs $1.2B $4.3B 1.4B lbs

U.S. Imports U.S. Exports

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OUR NAFTA PRINCIPLES

Aluminum Industry Benefits from Modernized NAFTA

• Maintain NAFTA. The Association’s member companies have benefited from robust, fair and rules-

based trade of aluminum and aluminum products within the NAFTA trading region.

• Promote North American manufacturing. Ensure that NAFTA incentivizes manufacturing

production in the United States that sources from North American suppliers, and that the agreement’s benefits accrue to companies that invest in the region and their employees, while boosting the competitiveness of American manufacturing.

• Enforce the Rules. A modernized, strong NAFTA should facilitate the efficient movement of

aluminum and aluminum products within the NAFTA region while ensuring that NAFTA preferences are available only to aluminum articles that meet the agreement’s Rules of Origin. Strong enforcement of customs rules and cooperation among the NAFTA parties will allow U.S. businesses and workers to benefit from the agreement.

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