The Motor & Equipment Manufacturers Association (MEMA) recently provided testimony on the United States-Mexico-Canada Agreement (USMCA) before the US International Trade Commission on behalf of its division members.
Although MEMA supports the three-party agreement, it said, the testimony, delivered by Ann Wilson, the association’s senior vice president of government affairs, outlined three major concerns to address before the agreement is signed.
- The parties must agree to exempt Mexico and Canada from Section 232 tariffs on steel and aluminum.
- MEMA seeks greater clarity and implementation processes on a wide range of issues. These include understanding the impacts the automotive rules of origin steel and aluminum requirements will have on commercial relationships between suppliers and their customers, and clarifying the impact of the Labor Value Content (LVC) on suppliers.
- MEMA continues to be disappointed that the parties elected to impose quotas on parts imported into the US. However, to make the agreement function, the United States Trade Representative (USTR) must now specify the processes that will be used for assessing the caps in the side letters to the agreement if a Section 232 action is taken on automobiles and automotive parts.
“The current state of play on trade has placed our industry in turmoil,” Wilson said. “In the last year, our members have faced Section 232 steel and aluminum tariffs, other Section 232 tariffs proposed, and Section 301 tariffs on goods from China. At the same time, all our members are being pushed to lean in and provide new technology for the entire industry. This technology development requires investment, trained personnel and risk.
“For that reason, MEMA will be seeking implementing legislation that provides assistance for workforce training and assistance to retool and manufacture in the US. We share the administration’s vision of new manufacturing jobs and opportunities for all of our citizens. But the industry cannot get there on its own.”
The new trade deal, USMCA, is intended to replace the current North American Free Trade Agreement (NAFTA). After Section 232 investigations by the Department of Commerce, the Trump administration-imposed steel and aluminum tariffs on Mexico and Canada, as well as other trading partners earlier this year.
MEMA has been a leading voice in Washington and around the country advocating for a positive renegotiation of NAFTA. The previous NAFTA, nearly 25 years old, was due for modernization while ensuring the open and free market our members rely upon to remain globally competitive.
On Nov. 9, MEMA urged the Trump administration to exempt Mexico and Canada from additional tariffs on steel and aluminum in advance of signing a new North American trade deal. MEMA’s request was made in a letter to current USTR Robert Lighthizer in a Nov. 9 letter signed by MEMA Board of Directors Chairman Dan Sceli.