By Dennis Slater, AEM President

USMCAIt has been over a quarter century since NAFTA was negotiated. A lot has changed since then.

The internet was born, the world population has grown by two billion, and the three most valuable companies have gone from GM, Ford, and Exxon, to Amazon, Microsoft, and Google. With all the changes going in the world, especially here in North America, it makes sense then that an updated tri-lateral trade agreement between the United States Canada, and Mexico is needed for the 21st century.

Free trade is critical to keeping the U.S. economy going and our industry strong. For example, in Wisconsin where the Association of Equipment Manufacturers (AEM) is headquartered, one-fifth of the state’s jobs are supported by international trade. And the most important thing the United States-Mexico-Canada Agreement (USMCA) does is preserve duty-free market access to Canada and Mexico, two of our largest trading partners. Especially when considering 30 percent of the equipment manufactured in the U.S. each year is designated for export. At minimum, USMCA maintains duty-free access for our supply chains and our industry’s customers across both borders.

The USMCA also improves NAFTA in several ways that benefit the equipment manufacturing industry. For example, conducting business in 2019 is almost unthinkable compared to the early 1990s when NAFTA was implemented. So much of our industry’s technology is now web-based, which means that huge amounts of data are flowing between the U.S., Mexico and Canada. USMCA creates rules on e-commerce which help to eliminate barriers to the free flow of information across North America, which in turn removes unnecessary costs and improves the customer experience.

Such changes will allow for greater deployment of real-time analytics of data generated from equipment. That data can be used to increase fuel efficiency, better design engines to reduce emissions, decrease usage of fertilizers and pesticides, and increase customer productivity at construction sites and out in the field. This means cost savings for businesses and more eco-friendly practices for those concerned about the environment.

The USMCA also promotes remanufacturing, a process which recycles and modernizes used pieces of equipment to extend their usage. Remanufacturing is not only a cost-effective process for manufacturers and end users, but is also environmentally friendly by decreasing the amount of materials headed to landfill.  

The agreement also keeps the U.S. agricultural economy strong by providing better market access for U.S. agriculture. Under the agreement, U.S. farmers will sell more of their products to Canada and Mexico by eliminating trade-distorting practices and ensuring non-discriminatory treatment for agricultural products. Such changes will greatly benefit a sector of our economy continuing to face challenging market conditions.

For all of these reasons and more, it’s critical for Congress to begin the process of implementing the agreement and for the President to remove the steel and aluminum tariffs on Canada and Mexico. That’s the message AEM and its members continue to push to lawmakers, and it’s the message of more than 200 companies and associations AEM recently joined with to form the USMCA coalition. It’s also what we continue to tell elected officials as they take part in AEM’s national grassroots campaign I Make America this year, when they visit AEM’s member companies to hear directly from the 1.3 million men and women in our industry.  

To learn more about the USMCA and how important trade is to our industry, visit www.aem.org/advocacy, and if you aren’t already an I Make America supporter, you can become one today at www.imakeamerica.org.

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