Sanford Urges Administration to Protect American Workers
WASHINGTON, DC - Today, Congressman Mark Sanford (R-SC) joined Representatives Steve Cohen (D-TN), Mike Bishop (R-MI), and Terri Sewell (D-AL) in leading a bipartisan letter - signed by 72 of their colleagues - to United States Trade Representative Robert Lighthizer. The letter raises concerns that a new, proposed rule of origin standard in the North American Free Trade Agreement (NAFTA) would diminish America’s global, competitive advantage in the auto industry.
Currently, NAFTA requires that vehicles assembled in North America get 62.5% of their parts from factories on the continent. However, press accounts report that a new rule of origin proposal for autos and auto parts could drastically increase this requirement, which would fundamentally alter the very supply chains that have resulted in so much auto manufacturing coming to the United States.
“If the goal of renegotiating NAFTA is to ‘do no harm,’ then tightening the current rule of origin standard, which is already the highest of any trade agreement worldwide, seems like a recipe for disaster.” said Rep. Sanford. “South Carolina has certainly benefited from a more competitive auto industry, courtesy of NAFTA’s encouragement of open trade and investment. The proof is in the growth of BMW’s Spartanburg plant, Mercedes’ expansion to North Charleston, and the new Volvo plant set to open next year in Berkeley County.”
“I’m concerned that changes in the rules of origin in the North American Free Trade Agreement would affect long-standing business relationships and supply chains in and around my district and the Mid-South region,” said Rep. Cohen. “I hope Mr. Lighthizer and the USTR will reconsider plans for tightening rules of origin as proposed and avoid the disruption they would cause.”
“Michigan’s economy has always been deeply rooted in the automotive industry. From assembly plants, to suppliers, parts manufacturers, distributors and the many other job providers in between, our automotive supply chain depends on the success of NAFTA,” said Rep. Bishop. “There is no doubt the agreement must be updated to reflect our changing economy, but it is imperative that these potential changes do not end up hurting our workforce. Tightening the rules of origin too much could devastate U.S. sales, production and our ability to compete at a global level. I urge the Administration to examine the potential impacts and put American workers first.”
“For constituents in my district and families across the country, the advance of auto manufacturing under NAFTA has meant better paying jobs, more investment in local communities, and a stronger economy,” said Rep. Sewell. “While NAFTA must be updated to address the challenges our economy faces in the 21st century, I urge this Administration to protect the auto industry and the supply chain that gives our workers and manufacturers a leg up in today’s global marketplace. Disrupting that supply chain could have a devastating impact on auto manufacturers in the South and the families and communities who rely on this industry for jobs.”
“NAFTA continues to spur innovation and support high-paying U.S. jobs,” said John Bozzella, spokesperson for the Driving American Jobs Coalition and President and CEO of the Association of Global Automakers. “Hard working Americans across the country support their families and communities by working for auto manufacturers across the United States.”
Full text of the letter linked here and below:
The Honorable Robert Lighthizer
United States Trade Representative
600 17th Street, N.W.
Washington, D.C. 20006
Dear Ambassador Lighthizer:
We have watched with growing concern the negotiations over the future of the North American Free Trade Agreement (NAFTA). Our constituents, many of whom work in the motor vehicle industry, have benefited from more open trade around the world. For the automotive industry in particular, NAFTA has led to increased vehicle production in the United States, more secure jobs for those working in the industry, and a globally competitive U.S. motor vehicle industry that leads the world in innovation.
Last year, 13 automakers manufactured 12.2 million vehicles in the U.S. – over one million more vehicles than were manufactured in the U.S. in the year before NAFTA took effect. The auto sector was the nation’s leading manufactured goods exporter, shipping $137 billion in vehicles and parts to Mexico, Canada and the rest of the world. In 2016, autos represented 8% of the manufacturing sector’s contribution to GDP on a value-added basis, investing $8 billion in U.S. plants and equipment, and nearly $20 billion in R&D. In total, the U.S. auto industry supports more than 7 million American jobs.
While we agree that NAFTA should be updated to help our companies better address the challenges of the 21st century economy, it should not be terminated. Unfortunately, it appears that several U.S. proposals under discussion in the NAFTA negotiations, including the U.S. motor vehicle rule of origin proposal, would eliminate the competitive advantages provided to the U.S. auto industry under the current NAFTA rules – or lead to rejection by Canada and Mexico and the end of the agreement. Either outcome would adversely affect the U.S. auto industry - reducing sales, production, and exports and harming U.S. workers in the process.
The effort to update NAFTA should not be considered in a vacuum. Our companies and workers in the auto industry face steep international competition for jobs, sales, and innovation. The North American supply chain that NAFTA helped create is essential to the success of American companies in winning that competition. We urge that any proposals you offer, and any agreement you may reach with Canada and Mexico, benefit and strengthen the U.S. motor vehicle industry and the millions of American workers this sector supports.