From nafta to an integrated north american steel market
This presentation is the property of its rightful owner.
Sponsored Links
1 / 29

From NAFTA to an Integrated North American Steel Market PowerPoint PPT Presentation


  • 51 Views
  • Uploaded on
  • Presentation posted in: General

From NAFTA to an Integrated North American Steel Market. Rafael Rubio NASPD Fall Conference Cancun , Mexico October 11, 2007. Agenda. I. Economic Integration II.Where do we come from? III.Where are we now? IV.Where are we heading for?. I. Economic integration.

Download Presentation

From NAFTA to an Integrated North American Steel Market

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


From nafta to an integrated north american steel market

From NAFTA to an Integrated North American Steel Market

Rafael Rubio

NASPD Fall Conference

Cancun , Mexico

October 11, 2007


From nafta to an integrated north american steel market

Agenda

I. Economic Integration

II.Where do we come from?

III.Where are we now?

IV.Where are we heading for?


I economic integration

I. Economic integration

●Integration is a process rather than a single act.

●The NAFTA steel sector can, and should, deepen its integration and movement toward the formation of one regional market:

─Increasingly interdependent.

─ Enhance competitiveness.

─Face common challenges form abroad.


How can 3 markets can be integrated

How can 3 markets can be integrated?

Two ways:

● Market Way:

3 markets can become a single one when companies have investment or customers in the other markets and make no geographical distinctions in their operations.

●Institutional Way:

When governments create the instruments and institutions that drive 3 markets into become a single one.

●Steel sector has been moving along those two ways.


Ii where do we come from

II. Where do we come from?

●Fred Telmer – CEO Stelco. Chairman North American Steel Council (August 1992):

“We should be looking for open markets to increased trilateral steel trade: we agree that open markets should mean the elimination of steel tariff, non-tariff barriers and other trade-distorting practices”.

● His proposal: a North American Steel Sector Agreement as part of the NAFTA negotiations.


Nafta timeline

NAFTA: timeline

●1994:

NAFTA was the first step in Mexico's globalization.

For Mexico, It was more than a trade agreement.

● 1994 - 2004:

Mexico orientation was to signed more FTA (44 countries)

NAFTA was taken as “given”.

● 2005 (March):

Security and Prosperity Partnership of North America (SPP):

Work together more effectively and efficiently.


Nafta has been a successful story

25

140

Trade Balance

(Billion USD)

Accumulated

US Investment in Mexico

(Billion USD)

120

20

250

100

200

Exports

15

80

150

Imports

60

10

Annual

100

40

5

50

Trade Balance

20

0

2006**

1994

1996

1998

1995

1997

1999

2005

2003

2004

2000

2001

2002

-25

2007*

2004

2005

2006

2003

2002

1998

1999

2000

2001

1995

1990

1991

1992

1993

1994

1996

1997

NAFTA: has been a successful story …

Mexico – USA Trade

Source: Mexican Ministry of Economy Statistics with Mexican Central Bank Data

* 2007 Estimated from January – June 2007 data ** 2006 Data up to September 2006.


From nafta to an integrated north american steel market

… Changing our economy

1982

2006

Agricultural

Manufacturing

Oil & Mining

Agricultural

3%

25 %

16%

5%

Oil & Mining

Manufacturing

81%

70%

Mexican Exports

(%)

Source: BANXICO


The market way in steel

The Market Way in steel

● The steel trade between Mexico and the US has been growing over time.

● Mexico has a surplus in some products and a deficit in other. In some products, Mexico is the largest exporter to the US Market.

● The US, on the other hand, is the largest exporter to the Mexican market.

● BUT, there has been trade frictions. Less than in the past. Current cases are in pipe and tube.


From nafta to an integrated north american steel market

3,000

Imports

2,500

2,000

Exports

1,500

1,000

500

Trade Balance

0

-500

-1,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007*

Mexico – USA Trade

Finished Steel Products

(thousand metric tones)

Source: Mexican Customs & CANACERO Statistics

* 2007 Estimated from January – July 2007 data


From nafta to an integrated north american steel market

1,500

Imports

1,000

500

Exports

0

Trade Balance

-500

-1,000

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2007+

2005

2006

Mexico – USA Trade

Flat Products

(thousand metric tones)

Source: Mexican Customs & CANACERO Statistics

* 2007 Estimated from January – July 2007 data


From nafta to an integrated north american steel market

400

350

Exports

300

Trade Balance

250

200

150

Imports

100

50

0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007*

Source: Mexican Customs & CANACERO Statistics

* 2007 Estimated from January – July 2007 data

Mexico – USA Trade

Weld Pipes

(thousand metric tones)


From nafta to an integrated north american steel market

120

Exports

100

80

60

Imports

40

20

0

Trade Balance

-20

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007*

Source: Mexican Customs & CANACERO Statistics

* 2007 Estimated from January – July 2007 data

Mexico – USA Trade

Seamless Pipes

(thousand metric tones)


From nafta to an integrated north american steel market

90%

80%

Weld Pipes

70%

60%

Finished Steel Products

50%

40%

30%

Seamless Pipes

Flat Products

20%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007*

Source: Canacero

* Estimated from January – July 2007 data

Mexican Imports

USA Share of Total Mexican Imports

(%)


From nafta to an integrated north american steel market

100%

90%

Weld Pipes

80%

70%

60%

Finished Steel Products

Flat Products

50%

40%

30%

Seamless Pipes

20%

10%

0%

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007*

Source: Canacero * Estimated from January – July 2007 data

Mexican Exports

USA Share of Total Mexican Exports

(%)


From nafta to an integrated north american steel market

70%

60%

Canada

50%

40%

30%

Mexico

20%

10%

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007* 

Source: AISI.

* Estimated from January – July 2007 data

USA Exports

Mexico & Canada Share in Total USA Exports

(%)


The institutional way

NAFTA Negotiations

American Iron and Steel Institute

North American Steel Council

The Institutional Way …


Some examples

… some examples

● North American Steel Council: a forum in which Directors from Producer Members located in Canada, Mexico and the United States can discuss public policy issues relating to the North American Free Trade Agreement (NAFTA).

● Section 201: Temporary safeguard imposed by the US government in March 2002. Mexico and Canada were excluded because of NAFTA.

● OECD Steel Committee: NAFTA worked as a group on common issues.


Iii where are we now

Steel companies with facilities in 2/3 countries

- Arcelor Mittal

- Gerdau

- US Steel

- Ipsco (SSAB)

- Timken

- Essar

- Tenaris

- Ternium

Steel Users with

facilities in 2/3 countries

- Caterpillar

- Auto companies

- Magna International

- Tyco International

- Associated Spring

- Lincoln Electric

- Home Depot

- Hubbell Electric

- Palliser

III. Where are we now?

●The Market Way: Trade + investments + consolidation = have increased market integration


The institutional way1

North American Steel Council

In December 2002, the NAFTA governments pledged to identify

areas in which they might work together to promote more openness in the North American steel

market and cooperation on steel trade and industry policies

North American Steel Trade Committee

October 7, 2003 ─ Mexico City, November 21, 2003.

The Institutional Way …


Developments

North American Steel Trade Committee

Security and Prosperity Partnership of North America

- Economics and security are intertwined.

- New economic rivals: China and India.

- Work has to be strategic and realistic.

North American Competitiveness Council

… Developments


North america is losing market share in world trade

North America is losing market-share in world trade …

Region

World Trade


From nafta to an integrated north american steel market

19.1%

20

Canada

17

16.3%

China

14

15.5%

Mexico

11

10.6%

6.8%

8

5

5.4%

2

1993

1996

1999

2002

2005

… Loss of international competitiveness in the US market …

US imports

1993-2006


From nafta to an integrated north american steel market

… As well as versus other competitors

BRICs vs. Mexico

% Change (2000 – 2006)

Source: : WTO, IMF and UNCTAD


Iv where are we heading for

Institutional Way

NASC/NASTC

NACCSPP

Market Way

Trade, Investment

and

Consolidation

Declaration of Governments (2006):

Steel: A Strategic Partnership – A Strategic Industry

North American Steel Strategy

IV. Where are we heading for?


North american steel strategy

North American Steel Strategy …

● Implement a North American Steel Strategy to benefit the North American steel industry by pursuing the elimination of external trade distortions, reducing the costs and the risks on intra-NAFTA trade, and promoting competitiveness and productivity.

● Sectoral approach: steel, pork, consumer electronics and chemicals.

● NAFTA Commission (August 14, 2007): the North American steel market is highly integrated and the industry in all 3 NAFTA countries share common interest and concerns.


Next steps

“We should be looking for open markets to increased trilateral steel trade: we agree that open markets should mean the elimination of steel tariff, non-tariff barriers and other trade-distorting practices”.

… Next steps

● Areas of work:

─ External trade

─ Internal trade

─ Competitiveness and productivity


From nafta to an integrated north american steel market1

From NAFTA to an Integrated North American Steel Market

Rafael Rubio

NASPD Fall Conference

Cancun , Mexico

October 11, 2007


From nafta to an integrated north american steel market

Weld Pipes

(thousand metric tones)

Seamless Pipes

(thousand metric tones)

3000

4000

3500

2500

Exports

Exports

3000

2000

2500

2000

1500

1500

Imports

1000

Imports

1000

500

500

0

0

Trade Balance

-500

Trade Balance

-500

-1000

2006

2002

2003

2004

2005

2006

2002

2003

2004

2005

Source: Mexican Customs & CANACERO Statistics

China Trade in Pipe and Tube


  • Login