ABC Attends the first 2017 Meeting of the Aluminum Association’s Government Affairs Committee, held in Washington D.C.

Agenda:

Meeting of the Government & International Affairs Committee

January 26, 2017
10:00 AM – 12:00 PM
1400 Crystal Drive Suite 430
Arlington, VA
1-877-744-6641, 6010

Mike Belwood, Chair

• Call to Order – Mike Belwood, Arconic
• Safety announcement – Curt Wells, Association
• Antitrust Policy – Lee Simowitz, Baker Hostetler
• Approve November 2016 Minutes – Mike Belwood, Arconic
• Political Landscape in Washington, D.C. – Bob Harris, Nutter Harris; Jack Nutter, Nutter Harris; Rich Goodstein, Goodstein Associates
• Update on CAFE Regulation – Matt Meenan, Association
• Update on Trade Activity – Jared Wessel, Hogan and Lovells; Al Goetzl, Seneca Creek Associates
  • Transition process and personnel
  • USTR’s WTO filing
  • ITC 332 investigation and research project
• Discuss Issues and Opportunities Matrix – Curt Wells, Association
• Review Political Affairs – Joe Quinn, Association
• New Business – Mike Belwood, Arconic
• Adjourn – Mike Belwood, Arconic

Full Minutes from the meeting will be published shortly, however, here are some takeaway points:

The Aluminum Association and the GAC represents the industry across the whole of North America

The Government Affairs Committee includes industry lawyers and lobbyists, as well as leading primary and secondary producers, all of whom provide input for establishing, directing, and guiding, the Association’s Policies and initiatives, and positions, including in relation to interaction with the Trump Administration and the U.S. Government. And the Association represents its members from across all North America; the U.S., Canada, and Mexico.

Tariffs

There has been recent speculation concerning possible import duties. The Committee discussed this subject at some length. ABC would like to share the following, from our research and from what we have been told, advised, and understand.

It is generally believed that the suggestion made by Sean Spicer, Press Secretary, about a 20% tariff on imports from Mexico as a means of paying for the Wall, is unlikely ever to be imposed. Indeed, the suggestion was very quickly walked-back last week.

In any case, for tariffs to be become law, it is believed that Congress would need to approve, and two senior Republican senators Lindsey Graham and John McCain have already publicly gone on the record that they will oppose any such idea, principally because of the effect tariffs would have upon the U.S. consumer in the form of higher prices. Also, there are WTO and GATT implications that may hinder the imposition of import tariffs from Mexico.

There is a possible Cabinet strategy – should the tariff suggestion become more prominent as the preferred means of paying for the Wall, and a Bill be placed in the House and Senate, its probable rejection would provide some cover for the President with the American public.

The Aluminum Association’s current take is that if tariffs are imposed at all, these will not relate to existing relationships; simply that their primary objective will be to prevent wholesale relocation of manufacturing plants from the U.S. to other countries.

Position Paper and PR Strategy

A Position Paper is being prepared to influence the Commerce Department regarding the aluminum industry’s needs, and a revised Public Relations strategy is also in hand.

Industry Research – Harbor Aluminum – Re: Mexico-U.S. Trade Analysis

Harbor Aluminum, a highly-respected Industry Intelligence Monitor and Source, has collated data and statistics over many years. Their information is reassuring about the very fair trade relationship that exists between the United States and Mexico for aluminum extrusions.

Their latest Report “Mexico-US Aluminum Extrusion Trade Balance” published in November 2016.

Bottom-line conclusions from the Report are as follows:

1. The U.S. is a net exporter of aluminum extrusions to Mexico. In the last four years, the net aluminum extrusions trade balance between Mexico and the U.S. has been favorable to the US by around 100 kmton.
2. Mexico´s aluminum extrusion exports to the U.S. seem not especially relevant. In the 2011-2015 period, Mexico´s aluminum extrusion exports to the U.S. have hovered between 14% and 16% of the total U.S. aluminum extrusion imports.
3. Conversely, Mexico is a relevant market for U.S. aluminum extrusion exports. U.S. aluminum extrusion exports to Mexico increased from 43% of the total U.S. aluminum extrusion exports in 2011 to 55% in 2015.
4. Even before NAFTA, Mexico´s aluminum products in general had a notably small duty. In 1990, Mexico´s aluminum products exported to the U.S. paid a weighted tariff of 1.3%.

Visit the website for Harbor

Wadih Kuri, President and CEO said today

“As a Member of the Aluminum Association’s Government Affairs Committee, ABC has full access to ongoing dialogue and is able to provide input as well.

We are committed to supporting the Committee’s hard work on behalf of the industry. Of course, talk about tariffs on exports from Mexico is a major concern. We are keeping a close eye on this situation and are taking every step to be at the front of the information curve, as is the Committee.

Based upon what we know so far, it looks increasingly clear that import tariffs are NOT going to be an issue. However, if anything unfolds of significance that we learn from the Committee, or, for example, from Harbor Aluminum, as a highly-respected intelligence source, or elsewhere, we will be updating.

And we are going to have regular features on the ABC website concerning industry activities being steered by the Aluminum Association and the GAC.

I would also like to thank our friends at Harbor Aluminum for their contribution of information incorporated in this Release.

To conclude, there is everything to be very positive about for the year ahead. Thank you, and my personal best wishes for 2017.”