AEM looks north to build new strategic partnerships

AEM canada

The Association of Equipment Manufacturers (AEM) is looking to build new bridges in Canada.

This month, the association announced it plans to expand its advocacy services north, after the AEM board of directors identified Canadian advocacy as a key strategic priority for the industry.

“Canada is arguably the most important international actor for our industry, considering the number of equipment manufacturers, parts and service providers and customers who call Canada home,” said AEM President Dennis Slater.

AEM currently represents about 90 member companies in Canada, ranging from original equipment manufacturers to dozens of parts and service providers.

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In Canada, equipment manufacturers support about 149,000 jobs. As well, equipment companies contributed US$15 billion to the Canadian economy in 2016.

Top export destination

From the Unites States perspective, Canada is the top export destination for heavy equipment. American construction equipment manufacturers exported US$9.1 billion in products to Canada, while agricultural equipment manufacturers sold US$2.1 billion in equipment to their northern neighbour.

“Canada is the leading export destination for manufacturers of construction and agricultural equipment in the United States. That is why our board of directors have identified expanding our advocacy services in Canada as a key strategic priority for our industry,” Slater said.

AEM’s Canadian strategy is already underway. The association has recruited an 18-member special working group, chaired by Skyjack President Brad Boehler, for its Canadian members. As well, AEM has joined the Canadian American Business Council (CABC), meeting with various MPs, and helped welcome Kelly Craft, United States Ambassador to Canada, at CABC’s State of the Relationship reception in November.

AEM also intends to increase its advocacy work in 2018 by welcoming members of parliament and government ministers to manufacturing facilities across Canada, and advocating for pro-manufacturing policies in Parliament.

“I am thrilled to see AEM take a more active role in advocating on behalf of our industry in Canada,” Boehler said. “Given AEM’s extensive policy expertise and connectivity with senior decision makers in both industry and government, the association is uniquely positioned to help companies of all sizes overcome legislative and regulatory issues impacting their economic growth.”

Top priorities

In Canada, AEM plans to advocate for agriculture policy, regulatory reform, infrastructure investment and workforce development.

However, the association’s new Canadian focus comes at a time of trade uncertainty in North America.

The North American Free Trade Agreement (NAFTA) is a top priority on both sides of the border for AEM, and the organization is engaging both the American and Canadian governments.

“Since the creation of NAFTA, our industry and our members’ customers have benefited greatly from duty-free access to the sector’s largest two export markets, United States and Mexico, Howard Mains, AEM’s Canadian public policy advisor, said in a letter to Global Affairs Canada. “Updating NAFTA has the potential to further strengthen North American competitiveness and incentivize investment in domestic manufacturing.”

In his letter, Mains also notes imposing additional non-tariff barriers to cross-border commerce would risk harm to the North American economy

“The imposition of tariffs, non-tariff trade barriers or overly restrictive rules of origin would cause catastrophic economic damage to domestic manufacturers,” Mains said. “For more than two decades, equipment manufacturers have integrated supply chains throughout North America.”

NAFTA recommendations

AEM has made similar recommendations to both the Canadian and United States governments. According to the association, a revamped NAFTA should retain the current disassembly rules. This would ensure parts reclaimed in the remanufacturing process are considered as originating in the jurisdiction where the component was disassembled.

NAFTA should also adopt changes to rules-of-origin to make it easier for manufacturers to qualify goods for NAFTA benefits, and ensure member countries harmonize tariff schedule codes.

As well, an updated free trade agreement should continue the current exemption of the DTA (derecho de tramite aduanero) and MPF (merchandise processing fee) on NAFTA originating goods.

Furthermore, AEM believes NAFTA should reduce the need for suppliers to print, sign and scan back trade documents to simplify customs procedures.

Finally, AEM has asked governments to allow for trans-shipments, where goods are still eligible if they leave customs control, provided that they do not undergo further processing.

The next round of NAFTA negotiations will be held in Montreal in January.

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