AEM was on the ground in Montreal, Canada last month to help lead the charge for an updated and improved NAFTA pact that takes the equipment manufacturing industry’s needs into account.

The industry came away encouraged that the United States would not initiate withdrawal from the agreement in the near future, and remains cautiously optimistic that a new agreement can be reached this year.

“It was an important opportunity for us to meet directly with representatives from the United States, Mexico and Canada to convey our concerns and priorities as it relates to NAFTA,” said AEM International and Regulatory Affairs Director Alex Russ. “AEM will continue to work on behalf of our members to help achieve the best possible outcome for our industry during successive rounds of NAFTA talks.”

Negotiators in Montreal made headway on NAFTA chapters related to anti-corruption, competition and small and medium enterprises. AEM continues to be concerned with several recent proposals regarding investor state dispute, rules of origin and sunset provisions.

In particular, AEM conveyed to representatives from each NAFTA government the industry’s concern that proposed content requirements for the auto industry would inadvertently affect the equipment manufacturing industry, and its parts and inputs suppliers. Representatives from all three NAFTA governments expressed their willingness to further review AEM’s arguments and consider alternatives to incentivize U.S. domestic machinery manufacturing.

AEM has repeatedly urged President Trump against withdrawing from NAFTA.

While Montreal represented a step forward in negotiations, the future of the agreement remains a major unknown. Negotiators must still resolve issues pertaining to investor state dispute settlement, sunset provisions, agricultural market access and intellectual property. AEM continues to conduct internal analysis on every new proposal and will keep its members updated heading into Mexico City.

Observers did leave Montreal more optimistic that NAFTA will stay intact for at least a while longer. The U.S. administration’s willingness to schedule a new series of rounds diminishes chances of a U.S. withdrawal, especially before stated hopes that talks would conclude by March of this year. Impending national elections in Mexico in July, and U.S. mid-term elections in November could further extend the duration of negotiations.

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