Industry Says Canada Discriminates Against Certain Plastic Parts

The largest plastics industry trade association in the United States wants renegotiations over the NAFTA to examine challenges for U.S. firms in Canada and Mexico — and it singles out Canada for particular attention.

The Washington-based Plastics Industry Association said in comments filed as part of the U.S. government's NAFTA renegotiation that there may be "discrimination of entry of plastic products ... into the Canadian market" for a limited set of goods.

"U.S. businesses continue to face challenges doing business with Canada and Mexico," the association said. "In particular, the NAFTA modernization negotiations must address the seemingly inaccessible parts of the Canadian market for some plastic products ... which places the U.S. plastics industry and the U.S. economy at a disadvantage."

In its filing to the Office of the U.S. Trade Representative, the association singled out 30 resins and plastic products as problematic in the Canadian market, including various kinds of self-adhesive plates, knobs and some acrylics and polyurethanes.

Association Chief Economist Perc Pineda said that since NAFTA started in 1994, the United States has exported $8.1 billion worth of those 30 products to Mexico. To Canada, by contrast, the filing said value of the same product exports was $0.

"The discrimination of entry of plastic products listed ... into the Canadian market is an unfair trade practice and has no place under a free trade agreement," the association said. "While a free trade agreement does not guarantee export sales or a balanced trade, there seems to be a discrimination against certain U.S. plastics products, which we feel should be looked into."

The group said that if the United States had exported the same value of those 30 products to Canada, it would have meant 42,000 additional U.S. jobs. The filing does not provide details about how the 30 products are being discriminated against.

The Canadian Plastics Industry Association declined to comment. CPIA President Carol Hochu said in a June 29 email that she plans to meet with U.S. and Mexico plastics industry officials for general discussions on NAFTA, and that she would respond after that.

The U.S. association said that in 2016, the U.S. plastics industry had a $12.26 billion trade surplus with Mexico and a $1.15 billion surplus with Canada. It noted, however, chronic U.S. deficits in machinery and molds with Canada, offset by larger surpluses in resins and products.

With Mexico, the U.S. plastics industry has consistently had surpluses in all four of the major segments of the plastics industry.

"While U.S. trade relations with Mexico in plastics have been positive since the creation of NAFTA, U.S. trade relations with Canada have been less than favorable, particularly prior to January 2008 when all tariffs and quotas were eliminated on U.S. exports to Mexico and Canada under NAFTA," the association said.

The group said its member companies support NAFTA but would like to address technical and non-tariff trade barriers, including inconsistent regulatory regimes, different machinery safety codes in each country and lack of transparency in Mexican and Canadian government rulemakings on importing requirements.

"We support the modernization of NAFTA for the sole purpose of enhancing U.S. access into Canada and Mexico markets," the group said.

USTR began public hearings in Washington on June 27 to solicit public opinion on negotiating positions for upcoming talks on revising NAFTA.