Thank you. It's good to be here.

As most of you know, APMA is Canada's national association of original equipment automotive suppliers. I represent about 300 companies that employ about 100,000 people in this country. Notably for the NAFTA negotiations, Canadian supplier firms employ 43,000 people in the U.S. in 120 plants and about 43,500 people in Mexico in 150 plants.

Throughout the NAFTA negotiations, as some of you know, we were present for every round. In addition to meetings with Canadian officials on a very regular basis, we had time at the White House, the USTR, the Palacio Nacional and all spots in between. Our Canadian positions and Canadian interests found voice on the front page of the Wall Street Journal, the New York Times, the Washington Post, the Economist and so on. We were very active and we were very vocal. I think the agreement is a positive reflection of what we were looking for.

This is a negotiation that no one asked for, from a party that cared only about headlines and Twitter. After four rounds, we finally got the American proposal. It was a self-destructive one. In automotive the proposal was that every vehicle manufactured in North America should have 50% U.S. domestic content.

Canada, importantly, with Mexico, stayed at the table, spent time over the next two rounds highlighting self-harm. Industry associations and stakeholders like ours spent time at the USTR and in Mexico talking about the American self-harm. They countered themselves twice, in March 2018 and then again in April 2018. Our strategy for staying at the table produced the fruit we wanted. They backed off their 50% U.S. domestic content. They came up with other tough terms, but they were negotiable terms.

This current government made a conscious effort and a decision on the NAFTA negotiations to consult openly and frequently with industry. We didn't do it altruistically. Industry was quite vocal about the fact that the Mexicans had an advantage because they took their industry with them in a model they call the “room next door”. The first meeting with this new government was actually at the APMA office with a trade minister, a chief negotiator, an ISED minister and his deputy minister. I thought that was a good step. That's how it is supposed to be done. We saw TPP with both the outgoing government and the incoming government done mostly in the dark; for suppliers, at least, I think the results reflect that.

The new CUSMA is the first increase in regional value content ever in a Canadian trade agreement. For automotive rules of origin, that means an increase in supplier volumes for Canadian plants and footprints of about 25% in shipments. That's $6 billion to $8 billion a year in new purchases, incremental purchases, of an industry that ships about $35 billion a year. To put that in context, that's the equivalent of landing two new greenfield investments in Canada. The last greenfield investment in Canada by a major automaker was in 2007. The upside is unprecedented. This deal for automotive suppliers, from our perspective, must be ratified. I spent time all over the continent during and after; I have spent a great deal of time since in Germany and Japan especially, as well as China. Current suppliers will see the most benefit of this new agreement and its terms, but we are of the opinion, shared by our American equivalent, that the current North American supply base does not have the capacity to meet the requirements for automakers to meet the compliance of 75% North American domestic content.

What it means is that we're also looking at an opportunity that we've been selling very plainly to the Japanese and the Germans especially: We're expecting a great deal of new capital investment in this country from new suppliers who will help their current automakers meet that 75% quotient. This deal has a regional value content level that goes to 75% from 62.5%; on parts, that number is 65% to 70% from 60%, and 70% of those core parts, if they are made with steel and aluminum, must be sourced in North America. In NAFTA we had 29 parts categories that were tracked for compliance. Essentially, we've doubled that.

There is an immediate transition to rules of origin post-ratification. We're hoping that ratification happens in all three countries this year, and there's a three-year phase-in for the RVC levels.

Please ratify this deal without delay. That's been our message in Washington. That's our message in Mexico City.

I'm happy to take questions.

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