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The recent U.S. election has brought to a head discussions on revisiting NAFTA. The APMA has been active in publically advocating for the importance of the trade agreement (prior to the election and ongoing), emphasizing the interdependency of the North American automotive supply chains in anticipation of any potential trade agreement discussions.
APMA members should be aware that we are on the forefront of all issues relating to trade and matters that may impact the Canadian automotive supply chain. While you may hear varying reports in the media concerning NAFTA and other trade agreements, APMA wishes to advise its members that we are actively working on your behalf and that your voice is being heard.
Below is a round-up of the most important articles over the last few months on the topic of NAFTA and the need for free trade-partners, in an increasingly global industry.
November 17, 2016
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But Canada’s auto sector, which is heavily integrated with both the U.S. and Mexican industries, said only a trilateral deal would work for Canadian automakers and parts suppliers.
“It (the North American auto industry) really only works if there are no borders,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, which represents Canadian independent parts makers.
“A revision of NAFTA for the auto sector – there’s likely zero support for it.”
November 16, 2016
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“There isn’t a binary decision that he can make that can solve that problem [of lost jobs],” said Flavio Volpe, president of Canada’s Automotive Parts Manufacturers’ Association.
Many of North America’s biggest manufacturers have supply chains stretching across all three countries, with products crossing borders multiple times before they are ready for sale. Changes to the NAFTA that complicate that flow could cost jobs in the U.S., as well as in Canada and Mexico, said Mr. Volpe.
“You’re going to hurt American interests, at some point, with any move you make. And those auto workers that voted for him, maybe, they work for those companies,” he said. …
The Canadian and U.S. auto industries are “almost completely aligned” on the NAFTA and free trade, said Mr. Volpe. That’s unsurprising, given that the same large automakers operate in both countries.
Mr. Volpe and the companies he represents will be delivering their message to existing allies in Congress, and relying on Canada’s embassy in Washington for introductions to new Representatives and Senators, said Mr. Volpe.
November 9, 2016
READ MORE HERE or HERE
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, said suppliers and tool makers with assets in the U.S. and/or Mexico have spent the last few months trying to determine the impact of a Trump presidency.
“It’s too early to express practical concerns, but we will have to be vigilant in telling the auto industry integration story in Washington,” said Volpe. “The challenge for Ontario and Canada’s auto industry is to make sure the new administration understands that any protectionist measures against imports equally affect the profitability of American companies. We’re so integrated, you can’t supply operations on either side of the border efficiently if that border gets thicker.”
READ MORE HERE
Flavio Volpe, President of the Automotive Parts Manufacturers’ Association, is also concerned about NAFTA being repealed, and what that would mean for a business that routinely ships parts across the border.”You can’t make a car in Michigan without parts from Ontario and you can’t make a car in Ontario without parts from Michigan, everyone knows that,” Volpe said.
For now, his organization will keep an eye on Trump. If the president-elect does move to repeal NAFTA, Volpe said his group will work with governments on both sides of the border to make sure Ontario’s industry isn’t damaged.
Flavio Volpe, head of the Canadian Automotive Parts Manufacturers’ Association, told Automotive News Canada the elimination of NAFTA, or at least a revised version of the deal, could be good for Ontario. However, the province would need help from Rust Belt states like Michigan, Ohio, Indiana and Pennsylvania, all of which voted for Trump.
“If the Great Lakes states and the Midwest States can explain to Washington that Ontario is essentially a part of that region, then it’s good for Ontario,” Volpe said. “But it will come down to state-to-state, province-to-state co-support and the articulation of how integrated we are.”
For example, 30 per cent of the parts used at the more than 10 auto assembly plants in Michigan come from Ontario, Volpe estimates.
As the vote grew closer, the auto industry started planning, APMA President Flavio Volpe said.
“People were starting to model what it would look like if a Trump victory meant a new look at NAFTA,” Volpe told Automotive News Canada, Nov. 9. “I think everyone was prudently saying, ‘If he wins, what does it mean for us?’
“I heard that in Washington, D.C. when we went there [in September] and we met with Congressional leaders and manufacturing leaders. I heard that in Detroit.
“And I certainly heard it up and down Highway 401 on this side of the border.”
That could bode well for Ontario if its partnerships with states like Michigan remain strong, Volpe said.
An estimated 30 per cent of the parts used in Michigan assembly plants alone are Canadian made, Volpe previously told Automotive News Canada.
“You can’t take for granted who may or may not advise the president,” Volpe said, “but certainly Michigan’s Congress representatives and Senate representatives will be able to very quickly state how important it is that the border stays fluid and those [Canadian] relationships don’t get disrupted.
“If we’re successful in doing that, I think Ontario and Canada is in a relatively better position than any number of Mexican states.”
Volpe said “a deep dive and debate on what NAFTA 2.0 looks like” is likely now that Trump won the presidency.
“I imagine there will be some compromises before they crystallize their position on NAFTA,” he said. “If the Republican Congress thinks pulling out of NAFTA is a bad thing, and assuming that’s where he wants to go, they have the ability within their jurisdiction, to put a fence around him.”
September 18, 2016
Flavio Volpe, president of the Automotive Parts Manufacturers’ Association of Canada, says the auto parts business operates on slim margins: “A 35 percent tariff would be a reckless instrument that would put an immediate chill on anybody’s investment in any of the three countries.”
Industry officials such as Volpe credit NAFTA with allowing North America to be competitive in an increasingly global industry. “The rise of Mexico as a free trading zone in my opinion is one of the catalysts that allow automakers to profitably go to a global product platform,” Volpe says.
Volpe, of the Automotive Parts Manufacturers’ Association of Canada, says Canada and other countries look to the U.S. to set an example. Recklessness on the part of the U.S. would encourage other countries to disregard world trade rules, he says. “Some of the rest of the world does cheat on those obligations,” Volpe says. “But the solution isn’t for the global trading leader to drop its standards in response.
“It’s a tough spot to be in. But you’re there for a reason. It’s like Superman getting into a bar fight. Why?”
August 8, 2016
Automotive-related companies, including in Windsor, have adjusted to NAFTA and created “the world’s most integrated supply chain,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association. Severing those links, he said, would be “problematic” and could harm the very manufacturing businesses Trump promises his plan would help.
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