On behalf of Canadian Manufacturers & Exporters (CME), our 2,500 direct members and the nearly 90,000 manufacturers across the country, we are writing regarding the government’s consultation on proposed safeguard action for certain steel products.
Manufacturing is the largest business sector in the country, directly accounting for 11 per cent of GDP, 75 per cent of exports, and 1.7 million employees in high wage, high skilled jobs in nearly every community across the country. Our sector both manufactures steel and is a large consumer of steel products. As a result, these consultations are of significant interest and concern to our members.
CME has publicly supported the government’s steel and aluminum tariff action and has consistently called for safeguard measures to guard against steel diversion. In our initial submission on steel and aluminum tariffs back in June, we highlighted the urgent need to introduce safeguards to protect the domestic market against third-country import surges. That is because US tariffs on steel threatened to distort global flows of these primary products. We are now beginning to see signs that this problem is materializing in Canada.
Consequently, CME supports safeguard action for steel plate, concrete reinforcing bar, energy tubular products, hot-rolled sheet, pre-painted steel, stainless steel wire, and wire rod for the following reasons:
1. Because of our proximity, steel originally intended for the US may be diverted into Canada and dumped by foreign exporters. This would undermine our domestic steel market.
2. Europe and other markets have already implemented safeguards and Canada must join this group or risk becoming a dumping ground for steel.
3. It will alleviate US concerns that Canada is a backdoor for steel products into their market and could potentially strengthen our relationship with the US and our NAFTA bargaining position.
4. Safeguards should not negatively affect Canadian companies already importing these items from abroad so long as the measures are specifically targeted to avoid import surges and the resulting negative price and volume effects.