Michigan Gov. Rick Snyder defends NAFTA in face of Trump threats

DETROIT—Michigan Gov. Rick Snyder is siding with automotive industry leaders in defending the North American Free Trade Agreement in the face of President Trump's continued threats to terminate the trade pact with Canada and Mexico.

Snyder said Jan. 15 at the North American International Auto Show at Cobo Center in Detroit that NAFTA "should continue" and be modernized to reflect internet innovations and changes in the automotive workforce and supply chain since it took effect in 1994.

"We wouldn't want to see NAFTA collapse or go away," Snyder told reporters after touring the auto show floor. "I think that would be a negative for all three countries."

The governor's comments represent some of the most forceful he's made to date about what should happen to NAFTA as Trump has sought to fulfill a campaign pledge of getting a better deal for American auto workers.

The ongoing negotiations over NAFTA were an undercurrent in the opening media preview days of this year's Detroit auto show as executives at General Motors Co., FCA US L.L.C. and Ford Motor Co. defended the trade agreement and remained optimistic it will survive.

Last week, Trump made clear in an interview with The Wall Street Journal that he hasn't ruled out withdrawing the U.S. from NAFTA, contending it could actually help the U.S. stock market.

"If we don't make the right deal, I will terminate NAFTA. OK?" Trump told the Journal.

The president's comments were made hours before FCA announced it will shift production of its next-generation Ram heavy-duty truck from Mexico to its Warren truck plant by 2020, potentially shielding the profit-generating truck from becoming entangled in new tariffs for Mexican imports should NAFTA be dissolved.

FCA CEO Sergio Marchionne said Monday that the Trump administration needs to "retune" its demands in NAFTA negotiations with Canada and Mexico, Reuters reported.

While the auto makers have long defended NAFTA, some state-level political leaders are just starting to become more vocal of their views about the trade pact and its impact on Michigan manufacturing.

The Wall Street Journal reported last week that Snyder is among several U.S. allies that Canadian leaders have lobbied in recent months for support in pressuring the White House to keep the general framework of NAFTA in place.

Snyder attended meetings at the White House last month and met with Vice President Mike Pence about NAFTA. During that visit, Snyder submitted a proposed set of "NAFTA solutions" that stated his opposition to the Trump administration seeking a new standard that 85 percent of car parts to be sourced from within the continent, up from the current 62.5 percent country of origin requirement.

The governor's office provided Crain's with a copy of the document Jan. 15.

Snyder's NAFTA talking points document says the current rules of origin "for the automotive industry are already the highest for any trade agreement in the world."

"Instead of increasing percentages, improve tracing of high value-add components," the Snyder administration document says.

Snyder advocated for stronger intellectual property protections and creating new digital trade provisions for industries and cloud-computing that didn't exist when NAFTA was crafted in the early 1990s before the advent of the modern internet.

The governor also called for removing all remaining tariffs "and non-tariff trade barriers" that deter Michigan agriculture producers and the state's forestry industry from exporting to Canada and Mexico.