When it comes to trade, there is no denying that governments have to pursue the best-case scenario for their own people. Discussion around boosting the economy, creating more jobs domestically and ensuring access to goods for families, are of vital importance when approaching trading relationships, and the ongoing NAFTA negotiations.
What if all of this could be accomplished while benefitting Canada, the USA and Mexico, and providing gains for specific industries? The chemistry industry has accomplished just this, and hopes that as Ottawa welcomes Mexican and American negotiators for the third round of NAFTA renegotiations, it can demonstrate how a modernized NAFTA can accomplish win-win-win outcomes for all parties.
Since entering into force in 1994, NAFTA has facilitated economic growth, job creation, and enhanced co-operation in the North American chemistry industry. Its success has been demonstrated over the past 23 years with trade in chemicals between NAFTA countries more than tripling, from $20 billion in 1994 to $63 billion in 2014.
Over the past five years, chemistry has also been leading the way in reinvesting in North American economies with over 320 new, global-scale projects initiated, valued at over $230 billion. According to the U.S. National Association of Manufacturers, this accounts for nearly half of all new capital spending in the manufacturing sector in recent years.
The chemistry industry is well-integrated with virtually all other industries and activities, providing inputs to 95 per cent of manufactured goods. Chemistry is also a global industry, with 38 per cent of all shipments traded internationally. Shipments from new North American facilities will find homes in global marketplaces. This will require open and efficient cross-border trade in North America, and globally.
The reality of a growing, globally oriented sector, underscores the importance to the chemistry sector of reaching successful, mutually beneficial outcomes in the ongoing NAFTA renegotiations. While NAFTA represented a gold standard in regional trade agreements when developed in 1994, there have been structural economic changes in North America, particularly in the services sector, as well as advances in more recent trade agreements that a modernized NAFTA should address.
We want to encourage other sub-sectors of manufacturing to, to reach out across borders and find areas of agreement rather than focus on areas of disagreement. Trade works when industries with common interests work together to achieve responsible regulatory standards.
In recent months the North American chemistry industry, as represented by the Chemistry Industry Association of Canada, the American Chemistry Council, and the Asociación Nacional de la Industria Química in Mexico, have collaborated to develop tripartite, consensus positions on the important NAFTA negotiating issues of Rules of Origin and Regulatory Cooperation.
These consensus positions were delivered to respective national negotiating teams in the weeks leading up to this round of negotiations in Ottawa. The chemistry sector will continue working with negotiators to incorporate these positions into the modernized NAFTA in order to provide rules of origin that are clear, simple and transparent, that exporters and importers understand; regulatory harmonization capable of protecting people and the environment in all three countries while also spurring innovation and improving our overall regional position in the highly competitive global chemistry sector; and supply chain synergies and efficiencies created through fewer barriers to trade.
On Monday, the trade officials of each of the Mexican, American and Canadian chemistry trade associations will hold a public, panel discussion on NAFTA and the chemistry sector to dive deeper into how a modernized NAFTA could have an even larger impact if it reflected the recent progress in regulatory, customs, transportation, and communication practices and procedures.
A good agreement is not going to just happen. It will require hard work, attention to detail, and an engaged business community. We are united in our support of a comprehensive review and modernization of NAFTA that energizes economic growth and job creation in North America, and we are ready to help drive it.
Bob Masterson is the president and CEO of the Chemistry Industry Association of Canada.
The Hill Times