In comments submitted on June 12 to United States Trade Representative (USTR) Robert Lighthizer, the Motor & Equipment Manufacturers Association (MEMA) took a firm stance on behalf of its members arguing that great care needs to be taken in renegotiating or modernizing the North American Free Trade Agreement (NAFTA).
The detailed comments, which were in response to the USTR’s request for comment on NAFTA, outlined a number of important positions, including:
- Motor vehicles suppliers are part of a global industry and are dependent on a worldwide network of suppliers and customers for continued viability and growth.
- NAFTA enabled “nearshoring” of an interconnected supply chain between the U.S., Canada and Mexico that has provided the opportunity for U.S. manufacturers to compete with the rest of the world.
- NAFTA fostered a 19 percent increase in motor vehicle parts manufacturing jobs in the U.S. over the last five years.
- Free and fair trade is imperative for a strong domestic supplier industry.
“MEMA members operate in a global industry with suppliers, customers and facilities worldwide,” said MEMA President and CEO Steve Handschuh in the statement. “Open markets and integrated supply chains provide the framework for economic growth and jobs in our industry. NAFTA has served our industry, the American worker and the U.S. economy well.”
While MEMA supports the NAFTA, the motor vehicle parts supplier industry also recognizes that some components of the 23-year-old agreement can be modernized, Handschuh said.
“MEMA supports the administration’s efforts to update NAFTA,” he said. “A modernized and renegotiated NAFTA should provide the United States with the framework for our industries, citizens and economy to thrive. MEMA urges the administration to renegotiate the NAFTA in such a manner to create a more competitive U.S. manufacturing environment. Care must be taken to balance re-shoring of U.S. jobs with the unintended risks to current workers and the supply base. The final NAFTA product must continue to provide for a vibrant North American supply chain, which supports U.S. jobs and competitiveness.”
Modernization could include encouraging more cooperation between the participating countries and the industry to improve international trade; creating forums for investor-state disputes; enforcing intellectual property rights; and promoting a harmonized regulatory system.
Monday’s comments were just one of many data-driven communications from MEMA to the Trump Administration regarding its concerns about tax and trade policies. In January, MEMA released an economic impact study that defines the critical role motor vehicle parts suppliers play in the U.S. economy. The report shows that motor vehicle component manufacturing industry in the U.S. has experienced robust growth, in part, due to increased demand and vehicle sales. The stability and integration of the North American supply chain has been particularly beneficial to suppliers, contributing to growth in jobs and investments in the United States. MEMA adamantly supports reasonable tax and trade policies that will allow this trend to continue.