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Why NAFTA Matters to Business

U.S. Chamber of Commerce launches national awareness campaign

By: Melissa Anders

With thousands of American companies facing potential economic impacts if the United States renegotiates or withdraws from the North American Free Trade Agreement (NAFTA), the U.S. Chamber of Commerce is aggressively working to get them involved in speaking out on behalf of the trade deal.

“Now that NAFTA is somewhat under attack, I think you’re seeing more and more recognition about the importance of NAFTA to the U.S. economy,” said Christopher Wenk, the U.S. Chamber’s executive director for international policy. “The facts themselves are, I think, absolutely staggering … it’s clear why we’re seeing manufacturers and service providers and farmers speaking up.”

Trade with Canada and Mexico supports almost 14 million American jobs, according to the U.S. Chamber. As the epicenter of the U.S. automotive manufacturing industry, Michigan stands to be the hardest hit. The U.S. Chamber estimates that 366,000 Michigan jobs could be at risk if the country withdraws from NAFTA. Michigan exported more than $37 billion to Canada and Mexico in 2017, which accounts for more than 60
percent of the state’s total exports, according to federal trade statistics.

President Donald Trump has called NAFTA the “worst trade deal ever made” and blames the pact for sending manufacturing and other jobs across the border as well as creating trade deficits with Canada and Mexico. Labor groups like the United Auto Workers also have criticized the agreement for causing American job loss and wage stagnation.

The U.S. Chamber, however, argues that if NAFTA’s duty-free trade went away and U.S. exporters started facing tariffs, there would be massive job losses, especially in the automotive sector. While U.S. Chamber leaders agree that the 24-year-old agreement could benefi t from being modernized and strengthened, they want to ensure that any changes would fi rst do no harm to American businesses.

“NAFTA is so much a part of the economic fabric of the United States and North American market, and we need to make sure that policymakers are hearing from businesses, manufacturers, and farmers,” Wenk said. “There’s a lot at stake here and it’s really important that they don’t do anything that’s going to take us backwards.”

Automakers and other major industries are actively advocating against proposed changes to NAFTA, such as a five-year sunset provision or new country of origin requirements that outline the percentage of an automobile’s inputs, such as parts and labor, that come from the United States, Mexico or Canada.

To get more businesses to join the conversation, the U.S. Chamber launched a “NAFTA Works” campaign. The campaign features a website, tradeworksforus.com, which includes videos profi ling various businesses and how the agreement impacts them. The site also offers state-specifi c trade statistics and information on how to get involved by contacting members of Congress and signing an op-ed or letter to the editor. The U.S. Chamber popularized the Twitter hashtag #NAFTAWorks through frequent tweets about the benefi ts of NAFTA.

One of the businesses profi led on the site is Owosso-based Rugged Liner Inc. Exports represent about 30 percent of business for the truck accessory manufacturer and distributor, which has created more than 30 jobs because of increased demand overseas, according to International Sales Director Yannick Greiner.

“As we grow our export business, we’re able to hire more people here, in Michigan,” Greiner said in an interview with the U.S. Chamber. “And, as we can create new jobs, more money is put into our local economy in ways that benefi t other local businesses and workers.”

“Free trade agreements reduce the duties and tariffs of our ‘Made in USA’ product and gives an ease of doing business,” he added.

Erik Stewart, president of Battle Creek-based Stewart Industries, said NAFTA has been a double-edged sword. The supply chain management company employs 90 people who support the automotive and aerospace industries. While he acknowledged his company has lost some business to Mexico due to cheaper manufacturing costs, he said the trade agreement does have its advantages, too.

One area he would like to see improvement on is digitization of the rules of origin process.

“NAFTA allows for the electronic certifi cation of goods, which cuts down on confusion and paperwork. Mexico has this capability but the U.S. has not been able to get itself into the 21st century regarding electronic certifi cation,” he said. “Rules of origin ought to also be self-certable.” U.S. Chamber offi cials are taking the NAFTA Works campaign on the road by visiting local chambers of commerce and farm bureaus throughout the country.

“For a lot of the big companies, they have an offi ce in Washington and they’re working on this. But for a lot of small and medium-sized businesses, obviously they’re busy running their businesses,” Wenk said, noting that more than 125,000 small and medium-sized businesses export to Mexico and Canada.

“That’s a lot of companies, that’s a lot of jobs. So, we need to make sure that those people are speaking out.”