Importance of North American free trade to the work truck industry

Wm. Craig Bonham
NTEA Board Chairman
Vice President, Commercial Vehicle
Safe Fleet
Belton, Missouri

This article was published in the August 2019 edition of NTEA News.

In May, I had the privilege of leading an NTEA delegation to The White House. We discussed a wide variety of issues concerning the work truck industry. Two, in particular, were of great interest to the current administration — infrastructure (and Federal Excise Tax repeal) and free trade. Of course, infrastructure reform is significant to us as our industry’s products rely on roads and supply much of the equipment needed to build and maintain them.

Free trade is a popular topic in North America. Our industry has been a North American Free Trade Agreement (NAFTA) success story. We benefited from the chassis built in Mexico and the easy north/south commerce of work trucks, bodies and equipment between Canada and the U.S. Imagine if all this commerce suddenly became subject to tariffs.

Our industry, along with the entire motor vehicle manufacturing industry, has become accustomed to the trilateral free trade agreement embodied by NAFTA. It has evolved and grown greatly since NAFTA was implemented in 1994. Parts, equipment, chassis, bodies and completed trucks move seamlessly between the three countries, and free trade is simply interwoven into our businesses. We don’t even think about it.

Any 25-year-old agreement needs to be reviewed in light of current realities. Online commerce, intellectual property concerns and labor issues are all different today and tugging on the current NAFTA for attention.

This is where the new United States-Mexico-Canada Agreement (USMCA) comes into play. It’s sometimes referred to as NAFTA 2.0 and known as CUSMA in Canada and T-MEC in Mexico. Whatever you choose to call it, it’s important to the work truck industry.

A lot of us don’t think about international trade and how it can affect small businesses. It can and does, particularly with regard to trade between Canada, Mexico and the U.S.

According to the U.S. International Trade Administration, of the almost 90,000 U.S. firms that export directly to Canada, 60% have less than 20 employees. In Mexico’s case, 58% of the 57,098 U.S. firms that export have less than 20 employees.

Data for small business importers is equally significant. There are more than 17,000 U.S. importers from Canada, and 43% of them have less than 20 employees. For Mexico, the number of importers exceeds 15,000 U.S. firms, and almost 60% have less than 20 employees. To summarize, the to and from for all three countries can have potential implications to small business.

According to The Wall Street Journal, “Trade Partnership Worldwide forecasts that transitioning to a scenario with no trade agreement of any kind with Canada and Mexico — and reverting to the higher tariffs and non-tariff barriers implied by trading under WTO rules and so-called ‘most-favored nation’ tariff rates — would result in the loss of as many as 1.8 million American jobs.”

The great news is that, with ratification by each of the three countries’ legislatures, we can be assured of even more stability and prosperity than was afforded us by the original NAFTA in 1994.

NTEA Board of Directors Executive Committee and staff at The White House. From left to right, front row, Tina Albright, Board third vice chairman/treasurer; and Craig Bonham, Board chairman; middle row, Steve Carey, NTEA president & CEO; Peter Miller, Board first vice chairman; and Jon Sievert, Board second vice chairman; back row, Doyle Sumrall, NTEA managing director; Suzie Clark York, NTEA managing director; and Mike Kastner, NTEA managing director.