Ann Wilson is the Senior Vice President for Government Affairs at the Motor and Equipment Manufacturers Association, MEMA, and she was one of the four speakers on the auto panel at the May 25 GBD event
NAFTA, From Cars to Carrots. The premise of her remarks was that, yes, NAFTA does need an upgrade, but that needs to be done with care because a lot of U.S. jobs - especially jobs among U.S. makers of auto parts - depend on NAFTA continuing largely as it is and has been for many years.
Citing a recent study, Ms. Wilson put the current number of jobs in the U.S. auto parts industry at 871,000. "That," she said, "is a 19 percent increase over the last four years." And, she said:
"NAFTA is part of the reason why U.S. employment in the supplier industry is so strong."
Two-thirds of the technology in today's automobiles, Ms. Wilson said, is developed by the U.S. auto parts companies in cooperation with their customers, the major automobile producers. She then turned back to the importance of NAFTA, saying:
Our industry ... operates in a global environment. We are very dependent on NAFTA for both our supply base and our customer base and our ultimate customers, which are the purchasers of motor vehicles.
Free and fair trade is imperative for a strong domestic supply base, and it's imperative for the supplier employment. And we recognize that we are central to the renegotiation and modernization of NAFTA.
... Not only has NAFTA been good for suppliers and our customers, the automobile industry and the trucking industry, but it's also been good for the workforce we have. [In that context,] we are encouraging the Trump Administration to take a look at NAFTA and [NAFTA] modernization.
Yes, Ann Wilson has her wish-list for things that might be usefully included in an upgraded NAFTA. Like
Charles Uthus before her, Ms. Wilson urged the negotiators to include provisions for recognizing U.S. certifications for auto parts, and she called for stronger protections for intellectual property rights. In the larger arena of intellectual property rights, the question of counterfeit goods looms particularly large for the auto parts makers. "Counterfeiting and anti-counterfeiting measures are really important to our members," Ms. Wilson said.
That said, the issue she returned to most forcefully was the risk of losing the benefits the U.S. currently gets from NAFTA. To cast a cold eye on that issue, one needs to play the "what if" game. What if Mexico's normal tariffs were re-introduced into U.S.-Mexico trade. The Boston Consulting Group, Ms. Wilson said, made some estimate of what the ensuing costs might be. Their projection: $16 to $27 billion additional costs to automobile producers in the United States. What would that mean to the industry? We'll conclude with Ms. Wilson's response to that question:
Those kinds of costs ...how would they be absorbed? One of the things we think could happen is what we call the de-contenting of vehicles. - [Taking out some of those things that are not required by the Federal Government, for example.] -- That could actually impact 25,000 to 50,000 jobs in the supplier industry.
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