How will the status of NAFTA affect York County?
As many throughout the U.S. anxiously await President Donald Trump's renegotiation of the North American Free Trade Agreement, regional experts weighed in on how the deal could potentially affect York County.
The region's top export markets are Canada and Mexico, according to Tom Palisin, so the deal could potentially have a great effect on local businesses.
Palisin, executive director of The Manufacturers' Association — a regional trade organization serving counties in Pennsylvania and Maryland, said it's too soon to tell.
"I guess the question still remains of how much will be resolved," he said.
Trump is attempting to renegotiate NAFTA, the nearly 25-year-old deal that reduced most trade barriers between the U.S. and its neighbors to the north and south — Canada and Mexico.
The president signed a preliminary deal with Mexico late last month, but word on whether the third NAFTA partner will be involved is up in the air.
John Lloyd, president and CEO of MANTEC, a consulting firm that acts as one of the state's industrial resource centers and maintains relationships with businesses across the south-central region, said involvement of both countries in a new agreement is critical.
Local impact: Locally, York-based Harley-Davidson Inc., for example, exports motorcycles to those countries, Palisin said, and Lloyd also knows of local companies that have plants in Mexico.
Harley's global communications contact did not return two emails seeking comment.
A representative from Dentsply Sirona, a manufacturer of dental products that has several locations in York County, did not wish to comment about NAFTA at this time.
Many association members deal with both importing and exporting, Palisin said — importing raw materials from outside the U.S. and building products to export.
As of 2016, the most recent year for which data is available, York County exported $2 billion annually in manufacturing products, the largest sectors being machinery at 12.5 percent and computer and electronic products at 11.7 percent, according to the International Trade Administration, a bureau within the federal Department of Commerce.
Of those exports, $537 million went to Canada and Mexico.
"We as a nation have promoted free trade," Lloyd said, noting that a global economy does not recognize political boundaries.
He said the U.S has established supply chains and depends on selling to Canada and Mexico, as well as to European and Asian countries.
O Canada? As of Thursday, Sept. 6, the U.S. was in talks with Canada on working the country into the deal — which will not reach Congress for a vote until after the November midterm elections.
Palisin said it's very important that the new deal is a tri-country agreement.
Canada is the No. 1 trading partner in the U.S., Lloyd said.
The Manufacturers' Association and World Trade Center Harrisburg are hosting a seminar Sept. 18 at the association's Manchester Township office on the current tariff situation and how to adapt.
If it were to turn into "an all-out trade war," Lloyd said, no one would win — especially not the consumer, who would have to bear the consequences of higher prices.
“It would be a huge disruption to the industry and the way they’re doing business right now," said Tina Weyant, executive director of WTC Harrisburg.
Updating the deal could be beneficial, she said, but including all three countries is important because, for some industries, the supply chains are already very integrated among all three.
Concerns: Palisin said the more pressing concern is the tariffs between the U.S. and China, as well as some other countries.
Though his consulting firm has not heard from companies about the NAFTA agreement, Lloyd said he had heard concerns over imported steel and aluminum tariffs in China and Europe, which have driven up the cost of raw materials and limited supplies.
"I'm concerned that we will see that with Mexico and Canada if we continue," he said.
Palisin and Lloyd agreed that the NAFTA deal will have more of an effect in the auto industry than other sectors of the economy. Lloyd said many automakers rely on component parts from Canada.
But adding tariffs and trade barriers in one area could eventually lead to other sectors, Lloyd said. "Actions have consequences."
Palisin, however, is optimistic that a new trade agreement could have some benefits, such as increasing wages for workers in the auto industry.
"If Mexico's low wages could be more on par with the U.S, that would put us in a better position, too," he said.
Palisin also said there was talk from Mexico over lowering barriers to markets. If Canada, which has high barriers on the food production side, would also follow suit, it could open markets that were previously inaccessible because of high tariffs, he said.