Global Automakers

Driving the Conversation on the Evolution of the Auto Industry

One Million Reasons Trade Matters

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Oct
19
2016
by: John Bozzella, President and CEO

I’m an optimist. 
 
On the day of the third and final Presidential debate, I’m hoping that consequential policy issues will be raised and discussed seriously.

The economy is one of the six selected topics that will be the focus of moderator Chris Wallace’s questions.  Since the subject of trade has resonated with voters this campaign season, I expect we’ll hear a lot of criticism of trade policy from both candidates as they explain their plans  to create more jobs and expand economic opportunity.
 
Both candidates share a skepticism of trade, and NAFTA in particular, especially as it relates to the automobile sector.  A front-page article in the New York Times today brought some needed perspective to the discussion about trade and the auto industry.  Here are some additional things to keep in mind.

  • The U.S. auto industry builds more than one million more vehicles today in the United States  than  in 1993, the year prior to NAFTA’s implementation. 
  • Exports of U.S.-built cars and trucks to all countries has more than doubled since 1993, from 978,155 vehicles to 2,007,830 in 2015.
  • The value of U.S.-built vehicle exports to all countries is nearly four time larger now than before NAFTA went into effect, rising from $14 billion in 1993 to more than $54 billion in 2015.
  • Of the more than 2 million U.S.-built vehicles exported last year, more than half went to just 20 countries that have implemented trade agreements with the United States. 

 What these numbers reveal is that our economy is not static, and neither is our industry. Not only are we producing more than ever, the value of the cars and trucks now being manufactured in the United States is increasing dramatically. 
 
In 1993, for example, U.S.-built vehicles exported to Mexico were valued at $91 million.  Last year, we shipped $2.8 billion worth of cars and trucks there.  How can that be? 
 
Automakers are producing increasingly sophisticated, high value vehicles in the United States for customers here and abroad.
 
Consider that when Nissan first built a plant in the United States, it built the Nissan truck.  Now it builds the Infiniti QX60.  Toyota once built only the Camry at its Kentucky plant.  Now it builds the Lexus ES as well as Avalon and Camry Hybrid vehicles there.  Honda began its US operations by building the Civic in Marysville, Ohio.  Now it also builds the Acura ILX, the Acura TLX and the NSX supercar at this plant.  

In the 1980s Chrysler Chairman Lee Iacocca famously said, "If you want to sell here, you should build here."  Well, that’s happened, and investments by these and other international automakers now creates jobs for some 1.25 million Americans. 

Will the candidates tell this side of the trade story?
 
Even an optimist has to wonder.

 

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