Barrier-free trading in the NAFTA region is vital for German manufacturers and suppliers
We welcome the agreement between USA and Mexico. Barrier-free trading in the NAFTA region is vital for German manufacturers and suppliers, since the three NAFTA nations’ value chains are so tightly interlinked. Car parts cross borders several times before a vehicle is fully assembled – which is why reaching an agreement with Canada is equally important, if new customs tariffs are to be avoided. We have to wait and see how certain regulations pan out, such as stricter rules for local value added or the minimum wage clause, which is not standard practice for a free-trade agreement. Since the end of the 1990s, German manufacturers and suppliers have increased the number of their facilities in the NAFTA area threefold to more than 430. And they need a stable, rules-based and WTO-compliant framework in order to operate and have planning security.
Large-scale manufacturers and suppliers have long since established global supply chains, which benefit the USA in particular. For example, shock absorbers or torque converters are made in Mexico and supplied just-in-time to the automobile production lines in the USA. Therefore, any measure that restricts the exchange of goods or makes it more difficult would also have a seriously negative impact on U.S. supply chains.