SIA Outlines NAFTA Modernization Priorities

Wednesday, Jun 28, 2017, 6:30pm

by Falan Yinug, Director, Industry Statistics and Economic Policy


As the Trump Administration considers renegotiating the North American Free Trade Agreement (NAFTA), SIA is focused on ensuring semiconductor industry priorities are maintained and strengthened in any new agreement. To that end, SIA today testified at a public hearing before the Office of the U.S. Trade Representative (USTR) regarding NAFTA modernization.

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International trade is essential to the U.S. semiconductor industry, one of America’s top export industries and a key driver of America’s economic strength, national security, and global competitiveness. Nearly half of U.S. semiconductor companies’ manufacturing capacity is in the United States, but more than 80 percent of our products are sold to overseas customers. As a result, semiconductors are America’s fourth-largest export, after aircraft, refined oil, and automobiles.

[LEARN MORE ABOUT THE U.S. SEMICONDUCTOR INDUSTRY HERE]

At the root of our industry’s strength is a complex and global supply chain for raw materials, equipment, R&D, human talent, testing, and distribution. The intermediate nature of our products also requires the import of and re-export of products to meet constantly changing customer needs. These factors, combined with the high-capital costs and short product-life cycles of our cutting-edge technologies, mean that our industry’s success and competitiveness depends on the ability to move semiconductors freely, efficiently, fairly, and quickly across borders.

With these priorities in mind, SIA’s testimony before USTR today, and its previously submitted written comments, urge the U.S. government to pursue a modern, trilateral NAFTA that incorporates the following key disciplines to ensure continued U.S. leadership in this critical sector:

1. Seek to eliminate market access barriers and discriminatory policies;

2. Seek to strengthen, not impede, the global semiconductor supply chain;

3. Take into account long-established production and manufacturing patterns
within the semiconductor industry;

4. Establish rules that send an important message to our trading partners that
fairness and collaboration – not discrimination and protectionism – will be
the hallmarks of 21st century trade and will be a priority in future bilateral
agreements pursued by the Administration;

5. Create a level-playing field based on zero-tariffs for semiconductors and ICT.

Prioritizing these areas in negotiations to modernize NAFTA will help promote free trade and continued growth and innovation in the U.S. semiconductor industry and throughout our economy.