Germany's large and export-oriented plastics machinery industry issued an unusual statement Nov. 23 decrying “any form of protectionism” and highlighting the importance of U.S. and Mexican markets, saying it was reacting to plans from U.S. President-elect Donald Trump to renegotiate NAFTA.
The Frankfurt, Germany-based VDMA trade association noted that the United States was Germany's largest export market in 2015 for plastics and rubber machinery, at 719 million euros ($757.6 million), surpassing China.
It also said German plastics and rubber machinery exports to Mexico rose 50 percent last year, to 168 million euros ($177 million), making it the fourth-largest market. VDMA expects German machinery exports to remain strong to those two countries.
“Existing free trade agreements are of fundamental importance for this,” said Thorsten Kühmann, managing director of the VDMA Plastics and Rubber Machinery Association. “Any form of protectionism on the other hand will be damaging to the business activities of all concerned.”
Kühmann confirmed that the release, while it does not mention Trump directly, is timed around the President-elect's comments.
The association said that in the case of Mexico, the “strong rate of growth may also be explained by the North American Free Trade Agreement (NAFTA), which has dismantled trade barriers in the region.”
None of the statistics in VDMA's statement were new: the association had presented the details of its exports to both the U.S. and Mexico in extensive comments earlier this year.
“We are concerned as we believe that global trade needs open markets,” Kühmann said in an email to Plastics News. “Trade agreements will have a positive effect on [global] trade!”
In Trump's campaign statements, he said his administration would “tell NAFTA partners that we intend to immediately renegotiate the terms of that agreement to get a better deal for our workers.”
In a Nov. 22 interview with editors and reporters at The New York Times, his most extensive with journalists since winning the election, he repeated those themes.
“We can't beat anybody, we don't win anymore. At anything,” he said, according to a transcript the newspaper posted on its website. “We don't win on the border, we don't win with trade.”
In a video released Nov. 21 outlining his first 100 days in office, Trump did not mention NAFTA but said he would withdraw from the Trans-Pacific Partnership trade talks.
He said his core principle would be “putting America first” and he said that he would “want the next generation of production and innovation to happen right here on our great homeland, America.”
Since the election, other plastics associations have defended trade.
The Washington-based American Chemistry Council, in a Nov. 9 post-election statement, called for “sound trade frameworks” to help realize the potential of shale gas-related investments.
“As one of our nation's largest exporting industries, robust trade in raw materials and finished products helps fuel the growth of our sector here at home,” ACC said.
“The $175 billion in investment in new factories and expanded production capacity by chemical producers, thanks to domestic shale gas, has positioned the U.S. to substantially grow its role as a premier supplier of essential materials for markets around the world,” it said, “but reaching that potential will require sound trade frameworks.
“We agree that trade should be fair, and also know firsthand that trade can unlock potential in our economy and create jobs here at home,” ACC said.
ACC officials have previously said both TTP and the Transatlantic Trade and Investment Partnership talks underway with Europe were important first steps in its trade agenda. VDMA said it would still support TTIP.
A Nov. 9 statement from the Society of the Plastics Industry Inc. in Washington did not mention trade, instead discussing natural resources, chemical health laws, tax policy and state and local restrictions on plastic products.
Some Trump administration transition officials have suggested that renegotiating NAFTA could involve much less dramatic sounding steps, such as stepping up annual reviews, or in the case of other countries, targeted tariffs less likely to draw major retaliation and prompt bigger trade conflicts. But the incoming administration's plans remain unclear, leading to uncertainty in business circles.