Uruguay round lowers tariffs on non-ferrous metals

Canada’s manufacturers of primary, non-ferrous metals and non-ferrous metal products can look forward to new export opportunities, owing to lower tariffs negotiated in the Uruguay round of world trade talks. The new rates should lead to increased investment in this country.

Supported by industry, Canadian negotiators at the world trade talks sought complete removal of tariff and non-tariff barriers to trade in non-ferrous metals. In the end, each of Canada’s major trading partners chose to make tariff concessions based on domestic and international concerns. As such, the individual offers vary substantially from country to country. Over a 5-year period, beginning Jan. 1, 1995:

n The European Union will eliminate its import tariff on nickel, and reduce by 20-39% its tariffs on copper, lead and zinc over various processed and manufactured non-ferrous metal products. Tariffs will drop by 25% on manufactured aluminum products but remain unchanged for aluminum ingot. n Japan will harmonize tariffs at a maximum rate of 3% (with some individual exceptions) for copper, nickel, lead and zinc. Tariff reductions on aluminum will range from 33% to 62%.

n South Korea will cut most tariffs by 50% on copper, nickel, aluminum, lead and zinc.

n Other industrialized countries will generally reduce tariffs by an average of one third.

n The non-ferrous metal sector will also benefit from the elimination of key tariffs in the construction, mining, machinery and materials-handling sector. They will also benefit from an average one-third reduction on a range of production equipment.

According to International Trade Minister Roy MacLaren: “This industry has been competing in the global marketplace for decades and has traditionally included some of the strongest supporters of the multilateral trade negotiating (MTN) process. Freer trade will benefit Canadian non-ferrous metals producers who are major players, when not outright leaders, in many markets.”

David Bumstead, executive vice-president of Noranda Minerals, was somewhat less upbeat: “We were disappointed with the outcome of the round. We had an opportunity to achieve elimination of tariffs on non-ferrous metals and it’s unfortunate — and through no fault of our own — that we did not obtain it. But even a third of a loaf is better than none, and this agreement is an improvement.”

The Uruguay round will open markets to trade and investment under a strengthened set of rules dealing with subsidies, countervail, anti-dumping and dispute settlement. It extends the General Agreement on Tariffs and Trade (GATT) to trade in services and commits 12 countries to open bidding on government contracts worth $125 billion. A new World Trade Organization will oversee swifter settlement of disputes and call on members to explain any changes in trade policy.

The agreement on Trade-Related Aspects of Intellectual Property Rights brings comprehensive worldwide protection to copyrights, patents, trademarks, trade secrets, industrial designs and inventions.

The non-ferrous metals industry can count on this agreement to protect its research and development in advanced materials, proprietary products and process and development. For example:

Increasingly, Canada’s large metal-processing companies are undertaking the development, production and marketing of new value-added materials. Alcan is a world leader in the production of aluminum matrix composites. Other firms, such as Inco, Noranda and Sherritt, are pursuing opportunities with respect to advanced materials and proprietary product development.

Canada is strong in sectors such as metal matrices, metal powders and ceramics, but it remains a marginal player in these sectors in relation to Europe, Japan and the U.S. It is estimated that the world market for advanced materials will approach $450 billion by the year 2000 and that the U.S. market will account for half that total.

In pursuit of “sustainable development,” the Canadian government and industry are increasingly collaborating on research and development of processes, technologies and products that will minimize the environmental impact of industrial activity. Over the past five years, industry has invested more than $1 billion in new plants and technology to meet the environmental and productivity challenges of today’s world.

GATT members have agreed to open markets to many international services in areas such as engineering and geomatics (a form of geological mapping). Production technology research and development, geomatics-processing technology and geoscience research are niches of excellence within Canadian industry. Canada is a world leader in the engineering and application of geomatics technologies, including plant design and remote sensing. The country is a leading producer of primary and semi-fabricated aluminum, nickel, copper, zinc and lead, exporting most of its total refined non-ferrous metal production. In 1992, total exports of processed metal products reached $10.3 billion.

Most of Canada’s metal and mineral exports go to the U.S. and this trade has been governed by the Canada-U.S. Free Trade Agreement, and now by the North American Free Trade Agreement.

But 34% of all metal and mineral exports from Canada go to markets outside the U.S. — 12% to Europe and 7% to markets in the Pacific Rim. Canada’s export interests in this sector now extend beyond Europe and Japan to newly industrialized countries in Asia, such as Korea, Taiwan and China. — John Crabb is an Ottawa-based freelance writer. This article was written with the assistance of the Department of Foreign Affairs and International Trade.