Background

The North American Free Trade Agreement (NAFTA) has facilitated manufacturing growth across North America since its adoption a quarter century ago. Canada and Mexico are the top two export markets for U.S. manufacturers of agricultural and construction machinery, and the equipment manufacturing industry depends on unfettered access to global markets for success. NAFTA is the world’s largest free trade area representing over $1 trillion a year in trade between all three countries.

Status

The United States, Canada and Mexico currently in the process of renegotiating NAFTA at the direction of President Donald Trump. Given the amount of trade and investment covered by NAFTA, any changes in the agreement can have a profound economic impact on all three economies. Negotiators are reviewing and updating the entire agreement including chapters on intellectual property, customs facilitation, rules of origin, dispute resolution and agriculture policy.

Position

AEM supports updating NAFTA to obtain the best possible agreement for the equipment manufacturing industry, and is advocating for a modernized agreement in both the United States and Canada. Specifically, AEM supports digitizing customs and border documents, streamlining tariff codes, addressing restrictions on cross-border data flow, new rules of origin to reflect the realities of manufacturers’ modern supply chains, and allowing companies who remanufacture depreciated products in the NAFTA region to qualify for the NAFTA agreement. AEM opposes ending the NAFTA agreement.

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