First NAFTA, next North American security

Now that President Trump has won agreement to replace NAFTA with the USMCA — the new U.S.-Mexico-Canada trade agreement — he has an opportunity to build on that accomplishment, and broaden the benefits of trade to strengthen national security. Taking that next step means harnessing all the resources in North America, the full critical mineral and metal supply chains, to take manufacturing to a new level, and safeguard access to raw materials that are integral to the defense industrial base.

Capitalizing on that upside is urgent — given the five-alarm firebell in the Pentagon’s just-released Defense Industrial Base Report.  While the detailed and deeply classified version of the report lists nearly 300 weak links in the U.S. defense supply chain, the public document states that “a key finding of this report is that China represents a significant and growing risk to the supply of materials deemed strategic and critical to U.S. national security.” 

{mosads}What should the U.S. do to shore up these weak links with a more reliable supply of key minerals and metals? Here are three immediate steps: 

1. Revitalize the National Technology Industrial Base (NTIB). Established in 1993 to strengthen technology links between the U.S. and Canada, Congress expanded the NTIB in 2016 to include the UK and Australia. This four-country economic colossus — with a combined GDP of more than $25 trillion — constitutes a vast reservoir of economic might to draw on for collective national security. With defense technology driven by the rapid development of materials science, the four NTIB nations also host production or known resources of all 35 of the minerals and metals on the U.S. Government’s newly-established Critical Minerals List. 

As the DIB report notes, Congress has ordered “DoD to [develop] a plan to reduce the barriers to the seamless integration across the National Technology and Industrial Base.” Given the dangers of what the Pentagon Report calls China’s “economic aggression,” it’s time to put this integration into overdrive. 

2. Sign USMCA Critical Mineral Defense Supply Chain Agreements. The new USMCA elevates side agreements to full treaty status. To create a North American common front on critical minerals, the U.S. should conclude side agreements to encourage cross-border collaboration on critical mineral production and advanced materials processing to ensure that the rich geologic assets of North America are fully leveraged for the benefit of the continent’s surety of supply. While Canada’s status as a resource producer is beyond question, Mexico is among the United States’ leading providers of four minerals and metals on the U.S. Critical Minerals List for which the U.S. is between 75 and 100 percent import-dependent.  

3. End the aluminum and steel tariffs on our USMCA partners. The U.S. should drop the so-called Section 232 tariffs — named for the seldom-used section of the 1962 Trade Expansion Act — on steel and aluminum imports from Canada and Mexico, so that the U.S. defense supply chain is once again fully integrated across North America. Particularly in the case of Canada, the U.S. tariffs ignore nearly 80 years of deep defense cooperation with our northern neighbor: Aluminum produced in Canadian smelters was central to the Allied war effort throughout World War II, during which the massive plant at Saguenay, Quebec supplied more than 40 percent of the Allies’ overall aluminum production. Today, Saguenay aluminum is on the U.S. tariff list. 

With agreement on USMCA, it’s time to reaffirm the importance of an integrated U.S.-Canadian Defense Industrial Base. As the Government of Canada’s official comments on the 232 inquiry noted, “open aluminum trade with Canada benefits the U.S. economy and its national security.” With aluminum on the U.S. Critical Minerals List, with the U.S. producing only 39 percent of the aluminum it uses each year and Russia and China among our leading suppliers, it makes no sense to slap a 10 percent aluminum tariff on Canada.

These three steps — expanding technology base cooperation between our leading allies, inking new defense supply chain agreements, and dropping the ill-advised Canadian aluminum and steel tariffs — are essential if the U.S. is to counter China’s economic aggression. The opportunity is here, to use the momentum generated by the new USMCA agreement as a springboard to take the strategic North American alliance to a new level. 

Daniel McGroarty, former White House special assistant and presidential appointee at the Department of Defense, has testified on Critical Mineral issues in both the U.S. House and Senate.