Daily Management Review

Rio Tinto: NAFTA revision leads to uncertainty


11/02/2017


Slow negotiations on the renewal of the North American Free Trade Agreement (NAFTA) creates uncertainty among enterprises and can damage investment and growth, said Alf Barrios, Rio Tinto’s Aluminum Executive Director, on Wednesday.



Jim Winstead
Jim Winstead
Canada and Mexico say that several US proposals for the modernization of NAFTA are unacceptable, which causes growing concern that Washington may abandon the tripartite deal.

Rio Tinto exports 75% of aluminum produced at its Canadian plants in the US and provides 30% of the needs of this market, Barrios said at an evening conference organized by the Canadian-American Business Council.

"The negotiation process caused uncertainty among businesses on both sides of the border, and I think that this to some extent puts the risk of investment and growth," he said when asked about the negotiations on NAFTA.

US President Donald Trump often describes the 1994 pact as a "catastrophic agreement" and threatens to withdraw from the deal unless serious changes are made to it.

The data show that Rio Tinto’s Canadian plants accounted for 53% of the 3.65 million tons of aluminum that the company produced last year.

Barrios said the NAFTA agreement created a predictable business environment that facilitated investment decisions and strengthened ties between Canada and the United States.

"Therefore, we are following very carefully how everything is developing, and we call on the negotiating groups to continue to search for ways to strengthen these relations," he said.

Speaking earlier in the day, Governor of the Bank of Canada Stephen Poloz said that the lack of clarity regarding NAFTA negotiations means that companies postpone investment decisions.

The rather tough position of the American negotiators casts doubt on the future of the entire transaction, an agreement about which was reached 23 years ago.

Proposals for a radical change in NAFTA to reduce the US trade deficit led to a change in the modernization negotiations, as a result of which some participants and analysts questioned how the NAFTA partners can avoid the impasse.

US requirements include forced repeat negotiations every five years, leaving the lion's share of the automotive production of the continent to the United States and simplifying the introduction of import barriers for some Canadian and Mexican goods.

Trump continued his attacks on NAFTA in all the negotiations begun in August, repeating his own threats of ending the entire treaty if Mexico and Canada did not agree to change.

The violation of the US NAFTA dispute resolution regime, plans to limit external access to government contracts and attacks on Canadian dairy producers and forest industry producers further exacerbated the gloomy mood among trade officials. 

source: bloomberg.com






Science & Technology

What trends will be affecting the health sector in the coming years?

Deloitte identifies main cyber threats for power industry

Zenuity To Take Self Driving Car Road Test In Sweden With Permission

Researchers: Half of Facebook users is fake

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

China Lifts Approval Freeze On New Video Games Launch

Concentrated Solar Plant System To Dispatch Electricity To The Grid On Demand

World Politics

World & Politics

AirHelp expects up to 33 th of cancellations and flight delays per day all over the world in 2019

Far-right and Catalonia: New elections in Spain

Trump is losing rating because of shutdown

Hanoi, Vietnam Chosen As Place For 2nd Summit Between Trump And Kim Jong-Un

US, China to hold new negotiations in Beijing

Human Rights Not To Be Dissociated From Stability, Macron Tells Sisi

Brexit Hijack Is Not The Parliament’s Right

Macedonia ignites political crisis in Greece