Dec. 9, 2015

Hickey: TPP Won't Provide Needed Trade Balance

On Dec. 3, the Industry Trade Advisor Committee on Steel delivered its findings on the proposed Trans Pacific Partnership to the president, the U.S. trade representative and Congress. The 18-person committee was unable to come to a determination in support or opposition to the trade agreement involving the U.S. and 11 other countries on both sides of the Pacific Ocean.

One night earlier, at the Association of Steel Distributors regional meeting in Chicago, Committee Member Bill Hickey was much more comfortable coming to a conclusion. “You’ve got to get on the phone with your representative, your senator, and tell them, ‘The TPP is a disaster.’ How do you negotiate a 5,700-page trade agreement with 11 countries? It’s a joke,” Hickey told the attendees.

The longtime steel executive was a member of the trade advisory committee, which expressed significant issues with the policy without coming to a specific conclusion. The committee, made up of steel industry executives throughout the U.S., took issue with the absence of mechanisms addressing currency manipulation, the lower thresholds on rules of origin and a limited definition of state-owned enterprises. The group was mostly satisfied with the agreement’s provisions on trade remedies, market access, government procurement and dispute settlements.

Altogether, “the committee is unable to render an opinion on whether the TPP itself will provide for equity and reciprocity in the steel sector. However, this decision is largely because trade in the steel sector does not appear to have been a negotiating priority for the TPP and, with the exception of the rules of origin section, the committee does not see the TPP as likely to have a material impact on steel trade or the trade-distorting practices practiced by countries that are not parties to the TPP,” read the committee’s report.

Hickey, however, expressed little satisfaction with the entire agreement or similar deals in the past. He sees no reason why this trade agreement will produce meaningfully different results compared to the most recent trade agreement with South Korea, which resulted in a shift in the trade balance between the two countries. Since that deal’s signing in 2011, Hickey said, South Koreans are barely buying any more goods from the U.S., while exports into the U.S. have grown significantly. Closer to home, of course, “the steel industry got slaughtered,” Hickey said. South Korea remains the largest exporter of steel into the U.S.

The rules of origin concerns voiced by the committee were on display in the trade deal with South Korea, Hickey said. While NAFTA trade requires 60-65 percent domestic content in traded goods, the threshold in South Korea is just 30 percent. Consequently, it’s believed, South Korean steel companies are purchasing low-cost and subsidized billet from China, providing minimal value-added services, then selling it into the U.S. as OCTG.

The United States’ 2015 trade imbalance is estimated at more than $700 billion, representing about 3 percent of total GDP. Getting that figure closer to even could boost the nation’s current GDP growth of 1-2 percent to nearly to 3-4 percent. “I don’t want a billion-dollar surplus,” Hickey said. “I just want balance.”


September 2017: Numbers Don’t Add Up for Service Centers
More...
 
Pause
September 2017: Lichtenstein: Five Steel Truths that Demand Attention
More...
Fall 2016: Cutting & Sawing Equipment
More...
Summer 2017
More...
 
Pause
Advanced Controls on Braner Slitters
More...
AHVS Precision Leveler Features Flip-Top Design
More...
Formtek’s Tishken Slitter Increases Production Volume
More...
Red Bud System Handles High-Strength Steels
More...
Bradbury Launches Flat Trak CL Monitoring System
More...
Artus Knives Custom Designed
More...
 
Pause
Privacy Statement  |  Terms Of Use
Copyright by Metal Center News



Friday, October 20, 2017