USMCA’s Impact on the Material Handling Industry
The United States has been pursuing an aggressive trade policy agenda and has made trade a centerpiece of its foreign policy priorities. There are many active trade negotiations underway or being considered including, but not limited to:
“U.S., Mexico, Canada Agreement (USMCA)
“Section 232” Steel & Aluminum Tariffs
“Section 301” Chinese Tariffs
“Section 232” Automotive & Automotive Parts Tariffs
U.S. & EU Trade Agreement
U.S. & U.K. Trade Agreement
Japanese Free Trade Agreement
Trade agreements are complex negotiations that must take into consideration economic, geopolitical, national security and a host of other issues in order to achieve a successful agreement. The United States Mexico Canada Agreement (USMCA), formerly known as the North American Free Trade Agreement (NAFTA), incorporates all of these components and more. As one of the first major trade negotiations in recent years, it also establishes the protocol and rules that will be followed by the many other trade agreements under consideration. It is critical to get this right.
USMCA is vital to ensuring a robust North American economy. The agreement, signed by the respective country’s presidents on November 30, 2018, modernizes and enhances trade relations between the three countries and is now pending ratification by each country’s legislature. Passage is crucial to maintaining a healthy U.S. manufacturing and industrial truck industry.
The USMCA rebalances trade relations between the three countries. Its passage is vital to preserving the strength and health of multiple American industries, including material handling and manufacturing. It’s important to consider the beneficial impacts of the trading relationship the U.S. enjoys with Canada and Mexico. They are the largest foreign purchasers of U.S. manufactured goods, and U.S. manufacturing success depends on this mature relationship. Consider these facts (source: National Association of Manufacturers):
– Canada and Mexico alone purchase one-fifth of the total value of U.S. manufacturing output.
– Canada and Mexico purchase more U.S.-made goods than our next 10 trading partners combined despite representing only 6 percent of the world’s population.
– The jobs of more than 2 million American manufacturing workers depend on exports to Canada and Mexico, along with more than 43,000 small- and medium-sized businesses.
Today, the powered industrial truck (PIT, i.e. forklift) industry annually exports over $900 million of equipment to Canada and Mexico duty free under the North American Trade Agreement (NAFTA). This equates to an annual trade surplus of over $400 million. It is essential to maintain this duty-free export business under the new USMCA. Without passage of USMCA, duties could once again be imposed on PIT exports to Canada and Mexico. Demand in those countries could be filled by lower cost (no duty) imports from other countries. This will negatively impact U.S. PIT manufacturers and U.S. manufacturing jobs.
For manufacturers and workers throughout the United States, the North American commercial market is one of the most important markets in the world. Passage of USMCA will continue to support and grow higher-paying American jobs, expand manufacturing in the United States, and improve America’s global competitiveness.
The USMCA promises to modernize trade by:
– Protecting ideas, innovations and digital property.
– Allowing manufacturers to sell products duty-free into Canada and Mexico and making it easier for small- and medium-sized businesses to sell to both countries.
– Creating fair competition for manufacturers with the same rules applied to U.S. and abroad.
The data provides sound evidence that the powered industrial truck market and its products are an integral part to keeping the U.S. economy moving. The USMCA is not only necessary, but essential, to maintaining and improving U.S. manufacturing.
About ITA: For more than 65 years, the Industrial Truck Association has been the leading organization of industrial truck manufacturers and suppliers of component parts and accessories that conduct business in the United States, Canada and Mexico. Based in Washington, D.C., ITA maintains an influential voice in international standards development for the industry. The organization also advances engineering practices to promote safe products, disseminates statistical marketplace information, and provides industry forums for learning and networking. Visit www.indtrk.org for more information.
About Brian Feehan: Mr. Feehan is president of the Industrial Truck Association (ITA) in Washington, D.C. As an industry organization representing the original equipment manufacturers (OEMs) of the powered industrial truck industry, it focuses on market intelligence, engineering practices and international trade policy. Mr. Feehan holds a B.A. in Political Science and a Masters of Public Administration from George Mason University in Virginia.