American steel producers said they need to see more details of the recently negotiated Trans-Pacific Partnership (TPP) agreement, but initially expressed concerns that some aspects of the 12-nation deal may be detrimental to them and their customers.
"Early reports give us concern regarding many of the areas that matter most to the steel industry -- including the auto rules of origin, currency manipulation and disciplines on state-owned enterprises," said Thomas Gibson, president of the American Iron and Steel Institute.
Philip Bell, president of the Steel Manufacturers Association, called the deal -- which is pending ratification by the signatory nations -- "an extremely ambitious undertaking" but initially withheld comment while the agreement was under review. "Ultimately, this deal will be evaluated on its ability to promote domestic jobs, competitiveness and net exports," Bell said.
Gibson said NAFTA steelmakers have stressed that the TPP must require regional value content rules of origin that are consistent with those previously set forth in the NAFTA -- 62.5% for autos and light trucks as well as their engines and 60% for other auto parts, and not percentages in the 40s and 30s, respectively, that are reportedly contained in the deal.
"We are very concerned about reports that the auto rules of origin in the final TPP set out a regional value content requirement that is much lower," Gibson said. "A weaker rule of origin here simply confers the benefit to the TPP [area] countries outside the agreement and would weaken critical existing North American auto supply chains."
Gibson also noted that the agreement does not provide for enforceable disciplines on currency manipulation. "If left unaddressed, currency manipulation could easily undermine any market access benefits to be gained under the TPP for the steel industry or its customers," he said.
Gibson said he was anxious to study the details of the TPP chapter on state-owned enterprises and what exclusions or other exceptions might have been made. "Any significant limitations on the scope of the new disciplines could seriously diminish the value of the TPP to US industry," he said.
