STEPPING STONES 1964: MAQUILADORA PROGRAM (BORDER INDUSTRIALIZATION PROGRAM) JANUARY 1989: CANADA UNITED STATES FREE TRADE AGREEMENT

Transcription

1

2 STEPPING STONES 1964: MAQUILADORA PROGRAM (BORDER INDUSTRIALIZATION PROGRAM) JANUARY 1989: CANADA UNITED STATES FREE TRADE AGREEMENT

3 BIRTH OF NAFTA DECEMBER 17, 1992: GEORGE H. W. BUSH, BRIAN MULRONEY AND CARLOS SALINAS DE GORTARI SIGN THE AGREEMENT DECEMBER 8, 1993: PRESIDENT BILL CLINTON SIGNS IT INTO LAW AFTER SENATE PASSES BILL; NAFTA GOES INTO EFFECT ON JANUARY 1, 1994

4 VOICES OF DISCONTENT BEFORE THE AGREEMENT WAS SIGNED, DIRE WARNINGS CAME FROM LEFT AND RIGHT: 1991: U.S.-MEXICO TRADE PACT: A DISASTER WORTHY OF STALIN S WORST WAS THE HEADLINE OF AN EDITORIAL PENNED BY THEN AFL-CIO PRESIDENT LANE KIRKLAND 1992: ROSS PEROT, RUNNING AS A THIRD-PARTY CANDIDATE FOR U.S. PRESIDENT, SAID DURING A DEBATE: THERE WILL BE A GIANT SUCKING SOUND GOING SOUTH

5 WERE THEY RIGHT? NAFTA WAS NO DISASTER. TWO DECADES ON, NORTH AMERICA IS MORE ECONOMICALLY INTEGRATED. TRADE BETWEEN AMERICA AND MEXICO HAS RISEN FROM 1.3% OF COMBINED GDP IN 1994 TO 2.5% IN 2015 THE ECONOMIST, FEB. 2, 2017 IN MAKING THE CASE FOR NAFTA, MP LESLIE ANDREW DESCRIBED HOW A COW RAISED IN ALBERTA GETS PROCESSED IN THE U.S., AND ENDS UP IN A BUN BAKED IN CALIFORNIA WITH WHEAT FROM SASKATCHEWAN, TOPPED WITH LETTUCE FROM ARIZONA AND A TOMATO FROM ONTARIO. YOU (GET) THAT (BURGER) FOR WHAT FIVE BUCKS? ANDREW SAID. THINK OF THE COMPLEXITY OF THAT. THINK OF THE DECADES IT TOOK FOR THE VARIOUS ELEMENTS TO REACH THEIR PEAK EFFICIENCY IN WHAT THEY WERE DOING BEST, INTO AN INTEGRATED SUPPLY CHAIN... HOW DO YOU UNTANGLE THAT? HOW DO YOU DO THAT AND RETAIN THE VALUE-ADDED THAT S BUILT UP OVER THE LAST 40 OR 50 YEARS? THAT WAS A SIMPLE EXAMPLE." GLOBAL NEWS, MAY 2, 2017

6 PLASTICSTODAY.COM

7 We Need to Talk About NAFTA! PLAST-EX, May 18, 2017, 12 noon, Centre Stage Carol Hochu, CPIA President & CEO

8 We Need to Talk About NAFTA! AGENDA 1. CPIA Who we are 2. Plastics Economic Indicators 3. Sector & Business Environment 4. Results from CPIA member survey 5. Perspectives from PLASTICS Industry Association & ANIPAC 6. Q&A 8

9 1. CPIA Who are We? 9

10 CPIA - Who We Are National voice of the plastics industry in Canada since 1943! Over 2,600 establishments 82,000 employees Shipments valued at $24.3 billion Members throughout the value chain 3 pillars/priorities Outreach/Public Perception Sustainability Issues & Opportunities Management (including NAFTA) 10

11 2. Plastic Products Manufacturing (NAICS 3261) Economic Indicators 11

12 Shipments $30,000 Shipments (Millions of CDN$) $25,000 $20,000 $18,856 $19,360 $20,437 $21,752 $23,056 $24,279 $15,000 $16,042 $10,000 $5,000 $

13 Gross Domestic Product $9,000 Gross Domestic Product (Millions of CDN$) $8,000 $7,000 $7,491 $7,112 $7,420 $7,665 $7,945 $8,349 $6,000 $6,054 $5,000 $4,000 $3,000 $2,000 $1,000 $

14 Domestic Market Domestic Market (Millions of CDN$) $30,000 $25,000 $20,000 $19,129 $20,833 $22,206 $23,586 $24,651 $26,092 $15,000 $16,979 $10,000 $5,000 $

15 Employment Employment (Thousands)

16 Imports from USA $9,000 Imports from U.S. (Millions of CDN$) $8,000 $7,000 $7,035 $7,613 $7,783 $6,000 $5,000 $5,592 $5,129 $6,047 $6,332 $4,000 $3,000 $2,000 $1,000 $

17 Imports from Mexico $300 Imports from Mexico (Millions of CDN$) $250 $250 $200 $209 $150 $149 $156 $176 $100 $105 $106 $50 $

18 Total Global Imports $14,000 Total Imports (Global) (Millions of CDN$) $12,000 $10,000 $10,185 $11,253 $11,703 $8,000 $8,576 $9,115 $6,000 $7,712 $7,153 $4,000 $2,000 $

19 Exports to USA Exports to U.S. (Millions of CDN$) $10,000 $9,000 $8,000 $9,023 $9,230 $7,000 $7,791 $6,000 $6,819 $6,611 $6,833 $5,000 $5,739 $4,000 $3,000 $2,000 $1,000 $

20 Exports to Mexico $180 Exports to Mexico (Millions of CDN$) $160 $167 $140 $145 $120 $100 $107 $80 $60 $40 $62 $77 $20 $34 $30 $

21 Total Domestic Exports $12,000 Total Domestic Exports (Millions of CDN$) $10,000 $9,658 $9,891 $8,000 $8,351 $6,000 $7,439 $6,216 $7,103 $7,346 $4,000 $2,000 $

22 3. Sector & Business Environment 22

23 Industry Concentration & Key Players Majority of establishments & output are concentrated in 3 provinces Ontario (46%/55%) Quebec (25%/25%) British Columbia (11% establishments/output N/A) 86% of businesses have fewer than 100 employees 99.5% have fewer than 500 employees Key firms include: 23

24 Business/Economic Trends & Challenges Affecting Sector Competitiveness Packaging & construction are stable areas Growth in packaging despite reductions in amount of packaging used Offshore competition issues of labour & shipping costs Access to skilled labour Maintaining price competitiveness Resin & electricity prices are impacting profitability Appreciating Canadian dollar 24

25 NAFTA Context 93% of domestic exports going to the USA Programs such as The Free and Secure Trade (FAST) program resulting from NAFTA allows for efficient movement of goods across the border Extremely high level of integration between supply chain members in the N.A. plastics market 25

26 Anticipated Impact of a General Increase in US Protectionism Potential renegotiation of NAFTA may have significant impact on Canadian producers Anything preventing the flow of raw materials or manufactured products would impact the US plastics industry as well US a significant plastic products supplier to Canada; ran a modest $1.4 billion CDN trade deficit in 2015 out of $17.2 billion CDN in bilateral trade Protectionist measures in this sector w/b disadvantageous for American firms 26

27 4. Results from CPIA Member Survey on NAFTA 27

28 Results - CPIA Member Survey on NAFTA 46 respondents Q1: Is your business concerned about possible changes to NAFTA? YES 89% NO 11% Q2: What are your biggest concerns? Impact to competitiveness Increased costs/tariffs/taxes/duties Increased protectionism ( Buy American ) Confusion/disruption around requirements Losing business Reduced margins Keep us from expanding 28

29 Results - CPIA Member Survey on NAFTA Q3: Where to you feel that changes to NAFTA could benefit your business? Likely will be no benefits/can t see any Free flow of goods & services Safety & responsible care (level the playing field with Mexico) Impose same change to goods coming into Canada If NAFTA changes can result in increased trade 29

30 Results - CPIA Member Survey on NAFTA Q4: Other Comments? Current NAFTA is working well, don t change it Tariffs will hurt trade & not provide net job creation NAFTA is outdated NAFTA is not the issued, imports from China are! 30

31 5. Perspectives from PLASTICS Industry Association & ANIPAC 31

32 Perspectives from PLASTICS Industry Association & ANIPAC NAFTA summit still to be scheduled Overheard recently at PLASTICS Industry Association Spring Board Meeting 32

33 6. Questions? Carol Hochu, President & CEO x

34 Where CPIA Fits in the Value Chain CPIA Advocacy & Industry Voice Outreach Educate Motivate Support recovery & end-markets Inform & Educate Feed Stock Package Consumer Reduce/ Reuse Recycle Energy Recovery 34

35 WE NEED TO TALK ABOUT NAFTA! THE MEDTECH PERSPECTIVE ADM Toronto MAY 18, 2017 Jason Lau Manager, Medtech Insights GAJAH ANNUAL REPORT

36 NAFTA DOES MAKE AMERICA GREAT NAFTA

37 PLASTICS IN MEDICAL DEVICES Smoke evacuation pens Biopsy guns Medical supplies, including IV bags, catheters, latex gloves Dilation balloons MRI systems Capsule endoscopes Embolization microspheres And the list goes on

38 NAFTA AND THE MEDICAL DEVICE INDUSTRY The US is the biggest importer and supplier of medical devices for Canada $ 1.8 billion medical device exports $ 7 billion medical device exports Mexico is the biggest exporter of medical devices to the US Source: Government of Canada, ProMéxico

39 BAJA CALIFORNIA CLUSTER Tijuana is home to over 30,000 medical manufacturing jobs and 24,000 plastics manufacturing jobs The Baja California cluster accounts for 33% of Mexico s medical device exports Excellent location

40 MEDICAL DEVICE CLASSES Class I Class II Class III

41 WHAT TO EXPECT GOING FORWARD Changes don t happen overnight (especially in the healthcare industry) Many companies will continue doing what works for them FDA requirements can increase the need for additional suppliers Medical device companies will be less affected than those lower in the supply chain, including plastics manufacturers Any significant changes to NAFTA will make losers in all three countries, including hospitals and patients

42 THANK YOU GAJAH ANNUAL REPORT