In a new piece for The Hill, American Resources Policy Network principal Daniel McGroarty zeroes in on the intersection between trade and resource policy.
Against the backdrop of the current negotiations to update the North American Free Trade Agreement (NAFTA), McGroarty argues that one of the metals ARPN followers have come to know as a key Gateway Metal – Copper – should be included in the new set of rules on NAFTA’s “auto rules of origin” provision on which negotiators from the U.S., Canada and Mexico may be nearing agreement.
“Metals used in our cars have simply been “deemed to originate’ within NAFTA, no matter that they come from Asia, the EU or elsewhere. Not surprisingly, the percentage of non-NAFTA materials in NAFTA country products has risen from 14 to 27 percent in the first 15 years of the treaty.
President Trump and his trade team have prioritized removing this blind spot on raw materials. According to officials close to the talks, there is an emerging consensus to add aluminum and steel to the country of origin requirements, which will strengthen the demand for these key metals.
That’s progress. But before the ink dries, here’s one more metal that the Trump team should be considering that would bring benefits to the western part of the U.S.: copper.”
Followers of ARPN will understand the underlying reasons: Copper is far more than your old school mainstay metal, and is becoming increasingly indispensable for a broad range of technologies, including the electronic vehicle sector. It is also a Gateway Metal to co-products like Rhenium, Tellurium, Cobalt and REEs, all of which can be found on Secretary of the Interior Ryan Zinke’s recently-released draft critical minerals list – thus inviting beneficial national security implications to the suggested addition of Copper to NAFTA’s content list.
“Right now, the U.S., Canada and Mexico are all among the world’s top 10 copper-producing countries (Nos. 4, 8 and 10, respectively), collectively producing over 2 million metric tons a year. With demand already outpacing supply, there’s a ready market for more North American copper production. There is simply no reason to allow non-NAFTA countries “copper citizenship” (or steel or aluminum for that matter) when it comes to calculating the North American content in our cars.
Doing so punishes North American metals and minerals producers, and contributes to a chilling effect that depresses the incentives for increased resource production. And while Mexico doesn’t produce much in the way of aluminum or steel, its significant copper production would give it a ‘metals win’ in the NAFTA negotiations.
With copper usage in electric vehicles ready to redefine metals requirements in the automotive sector, the U.S., Canada and Mexico should ensure that the supply chain for copper inputs is part of the strategy to make North America’s integrated supply chain — from mine to market — as competitive as possible.”
To read the full piece click here.
And to learn more about Gateway Metals and their Co-Products, read ARPN’s latest report here.