Free and fair trade is vital to growing the American auto sector and its manufacturing partners up and down the supply chain. The new United States-Mexico-Canada Agreement (USMCA) is essential to maintaining the competitiveness of our American and regional auto industries, and that’s why U.S. automakers are urging Congress to pass the agreement without delay.
With iconic brands and deep American roots, FCA US, Ford and General Motors produce more of their vehicles here in the U.S. – and source more of their parts from American suppliers – than any other automaker and all others combined. American automakers are driving a revival in U.S. manufacturing and investing heavily in the technologies of the future, including critical investments in research and development. In fact, today FCA US, Ford and General Motors employ nearly two-out-of-three American autoworkers, and operate three-out-of-five auto assembly plants in the U.S.
Over the past decade, the three companies have thrived – with significant growth in their investments, sales, production, exports, and employment. The integrated North American supply chain has helped keep our automakers competitive with their counterparts in Europe and Asia, which have similar regional integrated supply chains.
Not only will the USMCA help keep the American automotive industry as leading exporters, we believe the USMCA represents the necessary modernization of our North American trade rules. In addition, it will serve as a model for future agreements with our global trading partners.
The Trump administration struck the right balance in the agreement by crafting an automotive rule of origin agreement that discourages “free riders” while allowing companies that have made significant investments in the region to enjoy the agreement’s duty-free benefits. Admittedly, the more stringent rules of origin and U.S. sourcing provisions will require FCA US, Ford and General Motors to make changes to their businesses in order for their vehicles to comply with the new USMCA rules, but the rules do allow them adequate transition time to make the changes in a competitive fashion.
The USMCA also includes a ground-breaking provision that addresses currency manipulation. This is the strongest such provision ever included in a U.S. free trade agreement. Additionally, the agreement includes language ensuring acceptance of vehicles built to U.S. regulatory standards. We believe rules that address currency manipulation and regulatory standards should be included in every future U.S. free trade agreement.
AAPC and its member companies firmly believe that the new USMCA addresses real barriers to free trade, and will lead to more investments in the U.S. without undermining our competitiveness in the global economy. We therefore urge Congress to pass the USMCA as quickly as possible.
Matt Blunt is president of the American Automotive Policy Council and former governor of Missouri. AAPC represents FCA US LLC, Ford and General Motors.