Today’s U.S. automotive industry is a critical driver for the U.S. economy, supporting millions of direct and indirect jobs across the country. International automakers powered much of this comeback, investing more than $63 billion in the United States since the North American Free Trade Agreement took effect. Trade and economic integration enabled by NAFTA supports U.S. auto production, employment and global competitiveness.
During the campaign, candidate Trump promised to renegotiate the NAFTA. As President, he signaled the start of this process with the release of a 17-page list of negotiating objectives on July 17. Global Automakers supports the modernization of NAFTA and is working with the Administration to bring this important agreement into the 21st century.
It’s hard to believe the changes we’ve seen since 1993. When NAFTA was first negotiated, electronic stability control was non-existent, airbags were available only in a few higher-end models but mostly on the driver side only, and the average fuel economy for passenger vehicles was 28.4 mpg. Oh, and in-dash cassette decks were what every serious audiophile wanted.
Since that time the American economy and our industry have moved rapidly into the digital age. These advances have allowed us to make vehicles safer and cleaner running than ever before. A modernized NAFTA will help ensure that the promise of technologies yet to come – fully autonomous and networked vehicles for example – can be realized as quickly and efficiently as possible throughout North America.
Because modernization of NAFTA is critical, we recommend that an updated agreement:
- Remain a trilateral agreement.
- Retain the existing rule of origin for autos.
- Support the free flow of data, cybersecurity measures, privacy and data protection standards, and take other steps to support electronic commerce.
- Include upgraded protections for intellectual property.
- Include state-of-the-art customs and trade facilitation provisions, as well as a mechanism for addressing border infrastructures bottlenecks.
- Equalize incentives for U.S. vehicle production and exports.
One final word: NAFTA has strengthened the U.S. auto industry. U.S. production of cars and trucks, for example, is higher today than before the NAFTA rules went into effect by more than a million units! And while that was happening, the number of vehicles built by American workers and exported abroad doubled, while their value tripled.
This is an important story. Let’s make sure the next NAFTA chapter is equally successful for our industry, our workers and our customers.