Mexico is confident of reaching an agreement on US steel import tariffs and Canadian import safeguards, a government official said Monday.
"We are seeking total exclusions of the tariffs," said Rogelio Garza, undersecretary of industry and commerce at the Mexican Economy Secretariat during the Sixth Mexican Steel Congress, or Canacero.
Garza added the goal is to reach the agreements before the signing of the new North American free trade pact.
"Talks are well advanced, and we hope to bring good news soon," he said after presenting.
If total exclusion are not reached with the US or Canada, "Mexico will retaliate," Garza stressed. "But this is not what we looking for. We want free trade. We are not part of the problem."
The impact of US tariffs onto Mexico totals $3 million, he said, "which is the amount Mexico should retaliate back."
On the other hand, Mexico will try to prove its exports do not harm the Canadian market, demanding Canada to compensate for payments by Mexican exporters during this preliminary period, Garza said.
The new pact demands more integration rather than restrictions, he added.
Mexican steel exports to the US have fallen about 30% since the imposition of the tariffs, while imports from the US have stayed steady, said Maximo Vedoya, CEO of Ternium Mexico.
The US imposed 25% tariffs on global steel imports under the Section 232 investigation months ago and on June 1 for Mexico. The Canadian government announced October 11 it would introduce a provisional 25% tariff and quotas on certain steel imports, beginning October 25, in an effort to prevent the diversion of cheap foreign steel imports into that country. The US, Chile and Israel were exempted from the Canadian tariffs, while Mexico is partially exempted.
Mexico imposed in June 15%-25% tariffs over imported steel from third countries, but excluded the US and Canada.
PROTECTIVE MEASURES
Since October 2015, Mexico started protecting its home steel industry by imposing 15% import tariffs over a variety of products against countries with which it does not have commercial agreements. In 2017, it expanded the scope of the tariffs, parallel to the implementation of a system that monitors preliminary notices for imports.
"From the 1,775 preliminary notices analyzed so far, we were able to deter 5 million mt of steel products trying to enter the Mexican market under unfair conditions," Garza said, adding Mexico produced 20 million mt of steel products in 2017.
These blocked imports were priced about 40% below normal market levels in Mexico, he added.
