There are a lot of eyes and ears focused on the renegotiation of the North American Free Trade Agreement (NAFTA) currently ongoing between the United States, Canada and Mexico. Understanding what is at stake, the Buffalo Niagara Partnership called for strengthening our bi-national economy through a NAFTA renegotiation in our 2018 Advocacy Agenda. While the 20-plus year agreement needs modernizing, we are advocating for a ‘do no harm’ approach to protect the vital economic ties between Canada and the U.S. Members of the Partnership’s Manufacturing Council recently met with Canadian government leaders to discuss the value NAFTA brings to our regional economy.
Manufacturing Council member Seal & Design, Inc. does a lot of business in Canada and is paying close attention to NAFTA renegotiations. The Clarence-based manufacturer ships over $2 million worth of gaskets to over 400 customers out of its Toronto office annually. However, company leaders think NAFTA needs updating when it comes to trade with Mexico.
“We’d like to see tightened rules of origin as it pertains to NAFTA content,” said Rhonda Augustine, Global Supply Chain Manager for Seal & Design. “We’d also like to see a better balance on labor standards.”
Currently under NAFTA, Seal & Design ships its parts to Canada duty free. Absent NAFTA, the company would need to pay a tariff on the product they make in Clarence and ship to Toronto. If efforts to renegotiate NAFTA break down and the United States backs out of NAFTA all together, Dean Penman, president and CEO of Seal & Design say he will be left with two options.
“We either continue to supply our Toronto office and that market out of this facility absorbing a 6 percent margin or we transfer manufacturing capabilities to Canada.”
Penman says moving manufacturing operation to Canada would impact 10-15 jobs in Western New York.
Canada remains a primary growth market for Seal & Design. The company’s Canadian operations have grown by almost 300 percent since 2006 and are already up 15 percent year-to-date.
“It’s imperative that we get a deal done,” Penman said. “Having free trade throughout North America including Mexico is extremely important to the manufacturing community not just in Western New York but the United States as well.”
Check out the Partnership’s 2018 Advocacy Defined Series to learn more about our stance on the renegotiation of NAFTA.