NAFTAAEM urged the Trump administration to improve the North American Free Trade Agreement (NAFTA) in new comments submitted this week on behalf of the industry.

As the White House begins the process of revisiting the terms of the U.S.-Canadian-Mexican trade agreement, AEM warned against taking any drastic steps that would hurt equipment manufacturers’ competitiveness or duty free access to the two largest markets for U.S. manufactured equipment: Canada and Mexico.

“While we support efforts to improve NAFTA, imposing restrictive barriers to cross-border commerce would risk serious economic harm to the U.S. economy,” AEM Senior Vice President Nick Yaksich wrote in the submission. “Equipment manufacturers have spent over the past 20 years integrating supply chains across both borders. Disrupting these supply chains would make U.S. manufactured goods more expensive to produce and less competitive in the global market.”

About 30 percent of machinery manufactured in the United States is intended for export, and Canada and Mexico are the two largest destinations for U.S. manufactured construction and agricultural machinery. NAFTA, the 1994 trade agreement, helped facilitate improved trade across North America.

A survey last month of AEM members and dealers represented by the Equipment Dealers Association (EDA) found that manufacturers are largely satisfied with NAFTA’s existing terms, but would support small improvements that would update the 23-year-old agreement.

Updating NAFTA to including language on remanufacturing, digital trade and e-commerce, and having rules of origin provisions that strengthen existing supply chains while avoiding disrupting supplier relationships, will strengthen North American competitiveness and incentivize investment in domestic manufacturing.

For more information about NAFTA and other trade issues, contact AEM’s Alex Russ (aruss@aem.org, tel: 202-898-9064).

 

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