Legislation & Regulations, International

Trade groups welcome USMCA

On July 1, the trading relationship between the United States, Mexico and Canada turned the page from the North American Free Trade Agreement (NAFTA) to the new United States-Mexico-Canada Agreement (USMCA).

The USMCA, a Trump administration priority to recalibrate aspects of the three-nation trading regimen, has received words of welcome from several trade associations in the recycling, metal and paper industries.

The Washington-based Institute of Scrap Recycling Industries (ISRI) calls the USMCA “a victory for the recycling industry.” ISRI Vice President of Advocacy Adina Renee Adler says, “The market and policy certainty that comes with the agreement will support the 130,000 U.S. jobs that depend on strong regional trade for scrap commodities and the industries that depend on these critical materials. We look forward to reaping the benefits of this agreement, especially in support of a strong postpandemic economic recovery.”

A coalition of six North American steel and stainless steel associations issued a joint news release calling the USMCA “a critical milestone for the North American steel sector, its workers and its supply chains.”

That coalition included the American Iron and Steel Institute, Washington; the Canadian Steel Producers Association; CANACERO, a Mexican steel industry association; the Washington-based Steel Manufacturers Association, which represents electric arc furnace steelmakers; the Washington-based Specialty Steel Industry of North America, which represents makers of stainless and high-temp steel; and the Committee on Pipe & Tube Imports, Washington.

“The collective North American steel sector stands ready to work with our governments and supply chains to ensure the success of the USMCA and is willing and able to supply North American steel to our customers to meet their needs,” the six associations write in their press release.

While some aspects of President Trump’s desire to seek changes considered concessions from Canada and Mexico gained attention as USMCA was negotiated, on the metals front, at least one major change could provide support to metals producers in all three North American countries.

“The USMCA ultimately requires that 70 percent of the total steel and aluminum used in an automobile must be sourced from North American suppliers,” states Daniel Cannistra, a partner at international law firm Crowell & Moring, based in Washington. “Auto producers or original equipment manufacturers are going to need to document their steel and aluminum usage. They’re going to need their suppliers to feed this information to them so they can calculate how much North American aluminum they are actually using. An important step of this will be the development of a formal certification process.”

Some of the regulations pertaining to steel and aluminum origins for automakers were published in mid-June. Steelmakers and aluminum producers may need to verify their products came from a North American furnace, though some “melted and poured” requirements are not scheduled to be phased in until 2027, and they seem to differ for steel compared with aluminum.

Paper recyclers and producers of recycled-content paper and board also likely benefited from the smooth transition from NAFTA to USMCA, which was not always a given during the negotiation process.

Heidi Brock, president and CEO of the Washington-based American Forest & Paper Association, comments, “The American Forest & Paper Association recognizes that today is a historic day marking the entry into force of the USMCA, which will preserve free and fair trade in North America and commit the countries to combat illegal logging and associated trade.

“Especially now, as we face the COVID-19 global pandemic together, the USMCA will increase manufacturing capacity and investment in North America, providing stronger labor protections and expanded market access to help keep the economy and our industry going at this critical time,” Brock continues.

China affirms ban on solid waste in 2021

The Bureau of International Recycling (BIR), Brussels, says its sources in the People’s Republic of China have confirmed that China’s Ministry of Ecology and Environment (MEE) intends to ban the import of materials it considers “solid wastes” in 2021.

Starting in 2021, the MEE will “no longer accept and approve import applications for solid waste,” according to the BIR. The recycling association says news of the confirmation came from an MEE press conference held in late June.

Pertinent to the newest regulations, BIR says the MEE considers them “in line with the policies applied since 2017 to reduce the import of ‘foreign waste.’” The recycling association also says China will place a newly revised “Law on the Prevention and Control of Environmental Pollution by Solid Wastes” into force Sept. 1, “clarifying the legal requirements for the identification of attributes of imported goods ‘suspected of [being] solid wastes.’”

The dilemma for metals, plastic, paper and board producers in China—and the global traders who supply them—is that the Chinese government has in the past several years included a broad range of commonly traded secondary commodities in its “waste” classification.

Metals producers in China have been attempting to get higher grades of nonferrous and ferrous scrap reclassified as a “resource” rather than as waste. The nonferrous sector may soon benefit from that redesignation, while the ferrous sector is exploring a similar path now.

Plastics scrap imports into China have been scrutinized by that country’s government and subject to restrictions and bans for several years.

Additionally, the 2021 ban seems to prohibit scrap paper imports, which have helped feed China’s sizable containerboard and paperboard industry for the previous two decades.

Paper and board producers in that country seemingly have been preparing for the ban, in part by building or buying pulping facilities overseas so they can ship pulp, which has not been deemed a “waste” material.

Indonesian Embassy releases procedures for US exporters of scrap to the country

As per a requirement of Indonesia’s scrap import regulations that were finalized in late 2019, the Indonesian government has developed a process for exporters to register with the Indonesian Embassy and Consulates, according to a news release from the Institute of Scrap Recycling Industries (ISRI), Washington.

Adina Renee Adler, vice president of advocacy at ISRI, says the new registration process applies to exporters of all scrap commodities to customers in Indonesia, regardless of where the exporters are based.

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“The Indonesian government wants to understand better who is sending them materials,” she says.

While Adler says the new registration process is somewhat unique, she adds that it is similar to licensing processes used in China, though “not as onerous.”

Based on an email that Indonesian government officials sent to ISRI regarding the registration process, exporters based in the U.S. must submit a number of documents to the Indonesian Embassy as part of the registration process:

• an authenticated Certificate of Good Standing from the Secretary of State’s office where the U.S. company is registered;
• a notarized letter of statement;
a company profile;
• articles of association or a certificate of incorporation; and
• a signed application form.

ISRI says Indonesian government officials told the association that it takes about five business days to assess and process registrations once completed documents have been received; however, delays in processing because of COVID-19 are possible.

While this new rule applies to exporters in all countries, these guidelines are just for the U.S. exporters. Those in other countries must check with the Indonesian Embassy in their home countries for information on how to register.

When the regulations were finalized in late 2019, the Indonesian government had until July 1 of this year to implement registration procedures. However, with that date less than two weeks away when the process was announced, Adler says ISRI appealed for a grace period, which the government of Indonesia has agreed to.

Exporters have until Oct. 1 to comply with the registration process. However, ISRI says exporters are encouraged to begin the registration process as early as possible.

ISRI says shipments arriving into Indonesia before Oct. 1 can be released as long as they have been inspected prior to shipment and the importers receiving the material are licensed. For shipments arriving beginning Oct. 1, the importer will need a revised license that includes proof of the exporter’s registration.

Adler says the Indonesian government did not indicate whether scrap companies only need to apply once for registration or if registration will be a recurring procedure.

Scrap exporters in the U.S. can reach out to the Indonesian Embassy via email at commercial-attache@embassyofindonesia.org with questions.