The Chemistry in NAFTA


In the midst of the third round of NAFTA talks, iPolitics Live hosted a discussion about how the chemical industries are looking to make gains under a renegotiated NAFTA. The major players in the North American chemical industry have delivered a joint statement to the negotiators expressing support for the agreement, and noted ways in which they hope to further cooperation between all three trading partners.

“We are united on a range of areas,” said Greg Skelton, senior director for regulatory and technical affairs with the American Chemistry Council. “We think that it’s absolutely critical that we maintain tariff-free trade on chemicals in North America. We’ve used the metaphor that putting barriers on that trade is like putting a toll booth in the middle of a factory.”

Skelton said that the chemical industry is very integrated with a history of working collaboratively. Part of what they are looking for are ways to reduce the paperwork burden in order to move product across borders, and hope that a renegotiated agreement would reflect that modernization, and address the regulatory and non-tariff barriers that affect the industry.

“Often these barriers aren’t deliberate – it’s not something that countries look to create, but it’s a by-product of the way in which countries regulate,” said Skelton. “We think there are opportunities here to do some burden-sharing and collaboration as we talk about our respective regulations.”

It is estimated that NAFTA trades about a million dollars per minute, according to Guillermo Miller, vice-president of international affairs & economics with La Asociación Nacional de la Industria Química. Miller adds that a lot of that trade is touched by the chemical and petrochemical industries.

“Mexico is a different country than it was 23 years ago, and a modernized NAFTA would improve trade and made it greater,” said Miller.

One thing in particular that he is looking for is regulatory convergence, in order for North America to become the most competitive region in the industry, which would then have spillover benefits to other sectors in the economy. Part of doing that means making the country-of-origin rules more flexible, easier to understand and accomplish, such as through how they are certified.

Given the sound and fury coming from certain political leaders during the negotiation process, none of the industry players seem too concerned about the outcomes.

“I have a lot of confidence in some of the people who control the trade agenda within the Congress and Senate, and within the processes that are engaged,” said David F. Podruzny, vice-president of business & economics and board secretary with the Chemistry Industry Association of Canada. “I look on this as an opportunity. There have been many initiatives to try to get changes and tweaks to the agreement in the past, and this formalized it. We can make the glass half-full.”

Skelton said that the American negotiators in particular have found the industry’s joint statement to be helpful to them, as it shows what industry needs on all sides.

“In providing a joint statement, we feel like as industry, we’ve done our jobs in providing negotiators with a basis to factor in the view of industry in North America,” said Skelton.

Already, all partners operate with a Responsible Care ethic, that provides a guide map for ways in which regulatory convergence can improve health and safety in the industry, as well as environmental outcomes.

“Responsible Care in the US is a mandatory condition of membership in our association,” said Skelton. “It’s third-party audited and if you don’t pass your audits, we kick you out.”

Skelton said that statistics show that the chemicals industry has some of the lowest injury rates and emission rates in the manufacturing sector.

As for the possibility of an environment chapter, Skelton add that they would likely support one with the right language.

“We need a chapter that actually makes sense, a chapter that helps promote sound environmental practice while at the same time providing all stakeholders an opportunity to contribute to the discussion and to contribute to the protection of the environment,” says Skelton.


Watch the full show here: