NAFTA

The North American Free Trade Agreement (NAFTA) was formed in 1994 with the purpose of supporting and eliminating the barriers of trade between the United States, Canada, and Mexico. The rationale that this agreement was developed under, creates further incentives for economic growth and encourages imports and exports between all 3 countries.

NAFTA provides interesting opportunities to evaluate and monitor different trade groups and their interest in plastic policy development. Some influential actors are the Chemistry Industry Association of Canada (CIAC) which “proudly represents Canada’s chemistry and plastics sector leaders: innovators, solution providers, and world-class stewardship pioneers”. Another prominent actor is Canadian Plastics, which works as an industry networker and launching point for plastic related news. Lastly the Plastic Industry Association (PIA) is a Washington, DC based group that regularly attends and impacts foreign and domestic commerce policy for both Canada and the United States.

CIAC attends most conferences and NAFTA agreements panels. During the US presidency of Donald Trump, the US environmental policy shift towards a focus on halting environmental regulations. From this many concerns were raised that Canada’s more progressive plastic policy would halt transactions between the United States. This was due to the diverging interests the two countries had with regard to environmental and plastic policy.

This relationship was stressed even further in 2020 when Canada attempted to shift their plastic policy to become even more environmentally conscious. Another report came out highlighting the depth of the plastic pollution issue, Canada developed a new plastic management policy which involved amendments to allow Canada the ability to regulate plastic as a toxic substance.

In response the US Chamber of Commerce as well as a number of concerned plastic industry members, penned an open letter, highlighting their concerns with the recent implementation and impacts of Canada’s decision on NAFTA and the United States Mexico Canada Agreement (USMCA). Their concerns rested on the controversial claim that Canada’s scientific report and plastic plan did not rest on “sound science.” They also indicated that it may “violate USMCA provisions that commit all three NAFTA countries to engage in regulatory co-operation discussions and endeavour to apply a “risk-based” approach to regulating chemicals”(IATP).

• Multi-Association Letter to Minister Mary Ng on CEPA plastics issue

The “good-regulatory practices” and co-operation clause of the USMCA has been a contentious topic that has resulted in many different warnings and reports highlighting how it will allow for further corporate meddling. It gives voice to private industry organisation, which have actively been fighting against climate science, furthermore can allow for them to shift policy if it is not economically beneficial towards a industry needs environmental science. This is important to Canadian politics as it delegates power to corporations to allow for them to dictate certain laws. A study by the Canadian Centre for Policy Alternatives found that the changes to the USMCA have allowed for multinational groups to weaken the standard of business practice, safety and environmental regulation.

<aside> 👔 Tony Radoszewki president of the Plastics Industry Association said that “By designating plastics as 'toxic,' the Canadian government is recklessly making policy that could have significant negative impacts on human health...Simply put, the single-use plastic items we use every day are not toxic, but in fact are life-saving."

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Document 1: Good Regulatory Practices - Law and Additions from the USMCA

Document 1: Good Regulatory Practices - Law and Additions from the USMCA

Canadian Import And Exports of Plastic

In the year 2019 Canada exported roughly 15,000,000 US dollars in plastic exports. Below is a chart to highlight the amount of plastic that Canada has imported measured by import product share (%). The rise in product share corresponds with the increased demand for Canadian plastic. This can be attributed to Canada’s well developed fossil fuel industry which is a crucial part of developing strong plastic resin economy. Chart 2 shows the cost of Canadian Plastic and Rubber imports (US Dollars) from 1989 - 2019.

Chart 1: % of Canadian Imports that is Plastic and Rubber.

Chart 2: Import cost of Plastic and Rubber

The following table highlights Canada’s international exports and imports for different regions of the world for the year 2019. The embedded downloadable excel file has further metrics and statistics highlighting Canada’s plastic imports.

The following shows IEA data highlighting Canada’s plastic demand per capita for 2015. This is taken from the IEA report on the Future of Petrochemicals, which discussed a wide range of chemical applications, and its relationship to the environment. A key takeaway is that, “although plastic recycling plays a comparatively smaller role when it comes to emission reductions, improved waste management infrastructure – a necessary pre-requisite for the recycling increases in the CTS [Clean Technology Scenario] – lays the groundwork to drastically reduce plastic pollution from today’s unacceptable levels”.

Chart 3: Per capita demand for major plastics in selected countries in 2015 Notes: Plastics includes the main thermoplastic resins and excludes all thermosets and synthetic fibre. The quantities shown reflect the apparent consumption (production less exports plus imports) by the next tier in the manufacturing chain following primary chemical production (e.g. plastic converters for plastics). Source: METI (2016), Future Supply and Demand Trend of Petrochemical Products Worldwide, Tokyo, www.meti.go.jp/policy/mono_info_service/mono/ chemistry/sekkajyukyuudoukou201506.html; IFA (2018), International Fertilizers Association Database, http://ifadata.fertilizer.org/ucSearch.aspx.

CPTPP