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Mexico, Canada are cracking down on steel deal deals



J Carlos Baker, Mexico's Deputy Minister of Commerce, said Friday that his government may not sign the final text of the trade agreement between the United States, Mexico and Canada if the US were unwilling to impose tariff exemptions Steel and aluminum.

However, the Trump government is backing this demand as its counterproposal, a quota system, from both Mexico and Canada, which also seeks exemption from tariffs, is given a cold shoulder.

"We believe we need to resolve this issue before signing," Baker told reporters in Ottawa. The signature was provisionally set for the end of November.

It was the biggest threat yet from any of the negotiators to replace the North American Free Trade Agreement. Mexico and Canada have moved the US to lift tariff exemptions by 25 percent for steel and 1

0 percent for aluminum. They argue that now that negotiations have been completed for the USMCA, it is no longer necessary to maintain these tariffs.

However, the US has refused to grant the tax exemptions because they fear that this could damage China, the primary target of tariffs, on the US steel industry.

"The president is reviewing steel and aluminum tariffs," said Kelly Craft, US ambassador to Canada, at a forum hosted by the Ontario Chamber of Commerce. "It's nothing against Canada, it's easy We're going to protect North America from other countries that let raw materials through and protect our steel industry at home."

The White House initially made exceptions to Canada and Mexico for its steel and aluminum tariffs and then, in June 1964, as a way to pressurize both countries during the negotiations to replace the North American Free Trade Agreement.

The US has proposed to replace tariffs by a quota system, similar to what happened to steel in South Korea in August, allowing a quota of 70 percent of average steel exports to the United States in the years 2015 to 2017. Neither Canada nor Mexico show interest in looking for an administrative officer who requests anonymity y to discuss ongoing discussions. As a result, not much is said about the collective bargaining issue between countries, the official said.

A Canadian government official who said anonymously, the CBC earlier this week said a quota proposal was a concession that Canada would make. The officials see no reason why they can not return to the status quo of metal imports before the NAFTA talks. "It is not necessary for these tariffs to be introduced," said Canadian Ambassador David MacNaughton in Ottawa on Friday.

Supporters of government policy say a quota is still the best compromise for all sides. "From the point of view of the US industry The tariffs are as effective as the quotas if they are done right," said Michael Stumo, CEO of the Business Labor Coalition for a Wealthy America. From a Canadian perspective, they should rather have quotas than tariffs, because with a quota their industry gets the money, but with one inch, the US government gets the money. "

Critics claim that the systems lead to nepotism." They empower foreign governments to select winners and losers by deciding which steel or aluminum companies will be allocated to a part of the country quota for export to the United States, "said Bryan Riley, Trade Policy Analyst for the National Taxpayers Union. That's one reason that quotas are harder to eliminate than tariffs – they can create a political constituency abroad in support of quotas. "

Hugo Perezcano Diaz, deputy director of the International Law Program at the Canadian Center for International Governance Innovation and former NAFTA negotiator, speculated that the quota concept could lead to an alternative solution, a closed tri-country market." Canada already has one He said, "If Mexico did something similar and the three countries shut down the North American market, the US could feel protected enough to eliminate the tariffs . "


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