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Trade

U.S. chemical industry reacts positively to revised trade pact with Canada, Mexico

Agreement extends risk-based chemical regulation to Mexico

by Glenn Hess, special to C&EN
October 2, 2018 | APPEARED IN VOLUME 96, ISSUE 40

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Credit: Associated Press
Ildefonso Guajardo Villarreal of Mexico (left), Chrystia Freeland of Canada (center), and Robert Lighthizer of the U.S. represented their countries at NAFTA negotiations on Jan. 29.

The new trade agreement among the U.S., Mexico, and Canada, unveiled by the White House on Oct. 1, is a step in the right direction, according to an initial assessment by the American Chemistry Council (ACC), the U.S. chemical industry’s largest trade association and lobbying group.

The U.S.-Mexico-Canada Agreement (USMCA) is an overhaul of the 24-year-old North American Free Trade Agreement (NAFTA), which underpins $1.2 trillion in total trade between the three countries.

The trilateral accord is critically important to U.S. chemical manufacturers because Canada and Mexico are the industry’s two largest export markets. Approximately 46,000 chemical industry jobs in the U.S. now depend on trade between the North American neighbors.

Although ACC and its member companies are still reviewing the provisions of the updated trade pact, the industry group says the agreement “appears to include several enhancements long sought-after by the U.S. chemical sector,” including greater regulatory cooperation.

For example, in addition to maintaining duty free trade for chemical products, ACC says the agreement extends to Mexico the risk- and science-based approach to chemical regulation adopted in the U.S. Toxic Substances Control Act and the Canadian Chemicals Management Plan.

“The USMCA makes it possible for the U.S., Canada, and Mexico to work together to establish a more efficient and more effective regulatory environment—one that supports a risk-based approach to protecting human health and the environment while supporting innovation, economic growth, and jobs,” ACC tells C&EN.

Industry officials say this North American approach to chemical regulation could serve as a model for other countries and regions around the world that are developing or updating their own chemical regulations.

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Canada and Mexico led the primary importers of U.S. chemicals in 2017. Note:Excludes pharmaceuticals. Source: American Chemistry Council

The United Steelworkers, which represents 30,000 chemical workers, says it’s too soon to judge the new deal’s impact on working people.

“In the area of workers’ rights, the draft text we have seen includes significant improvements over the existing NAFTA,” union president Leo W. Gerard says in a statement. “That is encouraging, but it is not yet enough.”

The impact of the deal must be measured not only by what is in the agreement, Gerard says, but also by what the three nations do to ensure that the provisions are effectively applied, monitored and enforced.

The new continental trade pact could end 16 years after it takes effect if the three partners do not agree to extend the deal. The U.S., Mexico, and Canada will review the agreement every six years, and if new concerns arise, they will have to negotiate a fix or face the threat of the deal eventually lapsing.

In all three countries, the new trade pact must be ratified by lawmakers. U.S. President Donald J. Trump says he intends to sign the USMCA in late November. It will then be submitted to Congress for approval, a step that could be complicated by the outcome of the fall congressional elections.

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