ITC Unable to Begin Economic Impact Studies on NAFTA, US-Mexico FTA, ITC Chairman Says

It's uncertain how long it would take the International Trade Commission to report on the economic impact of an updated NAFTA, as required under Trade Promotion Authority, ITC Chairman David Johanson said during an Appropriations subcommittee hearing on Sept. 6. Commerce Subcommittee Chairman Jerry Moran, R-Kan., asked Johanson if the ITC's evaluation could be started before a deal signing and inquired on how long it might take. Johanson said he could not say how long it would take, but acknowledged they cannot even start without the text, and they do not have the text yet for the U.S.-Mexico agreement that was announced in late August. The ITC has 105 days from signing to finish, and if it took that long, a vote would likely come no sooner than the middle of next year, because Congress also has 45 session days to write the implementing legislation.

The Section 232 tariffs on steel and aluminum consumed much of the two-hour hearing on trade. About 95 percent of Section 232 product exclusion decisions where there were objections were denied, said Richard Ashooh, assistant secretary of Commerce for export administration. Ashooh noted that the Bureau of Industry and Security released an interim rule on how companies can rebut objections (see 1809060035).

Congress was also updated with the latest data on exclusions, from Sept. 3:

• There are 25,045 active steel requests and 3,619 active aluminum requests
• 4,051 steel cases have either been accepted or denied; another 6,329 have either been rejected for incompleteness, or have been decided, but not posted
• 222 aluminum exclusions have been accepted or denied; another 562 have either been rejected for incompleteness or have been decided, but not posted
• 1,218 requests have not been posted yet to start the opportunity for objections.

Sen. Lamar Alexander, R-Tenn., was particularly pointed in his questions. He asked if BIS considered, in making its recommendations on aluminum tariffs, that Canada supplies more than a third of aluminum ingots consumed in the U.S., and that its smelters are, by statute, part of the U.S. military industrial base. Ashooh stuttered a bit, and then said "yes." He noted that one of the options BIS presented to the president would have spared Canada from tariffs.

Alexander cut Ashooh off as the assistant secretary was saying there are aluminum plants that could be restarted. "There's one plant that's mothballed. Do you think a 10 percent tariff is sufficient to reopen it? The answer's no, because they haven't reopened it." Ashooh said it's in the process of being reopened. Alexander also argued with Ashooh's assertion that the decline of aluminum smelting is due to global overcapacity. "No it's not, it's one issue. The cost of electricity is too high to make that practical," he said, and in Canada, where there's hydropower, electricity is cheaper.