Trade Experts Say USMCA Important as Precedent-Setter
Even as one panelist said the changes to NAFTA won't really affect her Fortune 500 company, other panelists at the American Association of Exporters and Importers Annual Conference June 27 in Washington agreed that the deal's rewrite is important for the precedent it sets in future trade negotiations.
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Neena Shenai, principal global trade counsel for Medtronic, a medical device manufacturer that sells in 140 countries, noted that the International Trade Commission found "very small benefits" from NAFTA 2.0. But ratification of the U.S.-Mexico-Canada Agreement, as the rewritten trade pact is now known, is still important to Medtronic, which has 86,000 employees around the world.
"From our perspective in the medical device industry, Europe is a huge market for us," she said. "Our tariffs are largely at zero," she said, but the company is affected by regulatory issues and agencies that evaluate risk. Medtronic ends up focusing on "behind the border issues," she said.
Panel attendees said their companies or clients are most affected by USMCA, but EU-U.S. trade talks were ranked second. "The fate of any such EU agreement is very much tied to USMCA," Shenai said.
Panelist Leila Afas, director of international public policy at Toyota Motor North America, said her company's operations will definitely change as a result of the changes to NAFTA, though she did not go into detail.
Afas, who described herself as secretary of state for Toyota's North American division, said she has bigger concerns than ratification -- and that centers on the reliability of U.S. trade agreements. She said that when President Donald Trump threatened to put a 5 percent tariff on all Mexican imports, most talked about how that might affect USMCA ratification. She said that what people should have been saying is: "How could they threaten these tariffs when we’re still under NAFTA?"