Report: NAFTA renegotiations could spell trouble for US medtech industry

The North American Free Trade Agreement may not be facing the gallows after the Trump administration this week said it does not plan to terminate it – but changes to the deal could have a huge impact on the medical device industry, according to a New York Times report.

This week, Trump spoke with Mexican Pres. Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau and said he would start the process or renegotiating the deal, despite previous promises to eliminate it, according to the report.

Medical device manufacturers were identified as a particularly vulnerable sector to renegotiation in the report, as the US imports approximately 30% of its medical devices and supplies, with Mexico as the leading supplier.

Major corporations, including Medtronic (NYSE:MDT) and Integer Holdings (NYSE:GB), have set up factories in the region over the past few years. Moving those businesses back to the US is easier said than done, as the FDA requires detailed inspections and approvals for new facilities and factories, according to the report.

“Our companies make plans 5, 10 years into the future, sometimes at the very least. Uncertainty is always a challenge for our industry, and I think most others. We would certainly welcome policy clarity, sooner rather than later, and would like to work with the Trump administration,” Advanced Medical Technology Association chief strategy officer Andrew Fish said, according to the Times report.

Another Times report, released earlier this month, spelled out other issues that medtech companies could face if NAFTA is significantly altered.

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