The NAM is actively supporting the expansion of the Cape Town Convention to include mining, agricultural and construction (MAC) equipment. The Cape Town Convention on International Interests in Mobile Equipment is a treaty that establishes an international legal framework for equipment financing. By applying a uniform legal regime across borders, the treaty streamlines processes, reduces risk and lowers costs for financing certain exports.
The treaty’s first three Protocols have covered aircraft, railway equipment, and space assets. Currently, 55 countries are parties to the Convention. In the aircraft industry, for example, the Cape Town regime has been beneficial to manufacturers and exporters as well as airline customers and travelers. A recent economic impact study suggests that this expansion of the Cape Town Convention could increase sales of MAC equipment by about $600 billion over the next few years.
In a recent letter to the International Institute for the Unification of Private Law (UNIDROIT) Secretary-General, the NAM wrote that manufacturers “hope that a protocol covering MAC equipment could be of similar benefit to those sectors – even if complicated issues need to be addressed during the negotiations, such as the scope of the protocol and how to identify covered equipment. Manufacturers in the United States look forward to working with UNIDROIT to address those issues and develop a strong protocol.”
UNIDROIT’s Governing Council will decide in May whether to proceed with work on a new Protocol to cover MAC equipment. The U.S. government supports moving forward with the project, but a number of other countries have been hesitant.
Lauren Airey is director of trade facilitation policy, National Association of Manufacturers.