Thanks to tax cuts, deregulation, policies promoting energy independence and bipartisan reforms easing restrictions on community financial institutions, the American economy continues to grow. Unemployment is at a fifty-year low, real wages are up and the American consumer is strong. But the Federal Reserve is poised to lower interest rates again in response to several headwinds. These include a slowing global economy, partisan politics in Washington and lower business investment due to trade uncertainty.
Fortunately, President Trump has kept his promise to renegotiate the North American Free Trade Agreement (NAFTA) in favor of a more free, fair and reciprocal trade deal with Canada and Mexico. This rebalanced trade agreement, known as the United States Mexico Canada Agreement (USMCA) is good for American workers, farmers, consumers and employers.
To be sure, we need a more fair-trading relationship with China. But a rebalanced trade deal for North America would be even more impactful. Trade with Canada and Mexico represents twice the volume and five times the exports as trade with China for the United States. Mexico surpassed Canada to become the United States’ largest trading partner earlier this year and the two countries account for over one-third of total U.S. exports and imports annually. Trade with Canada and Mexico supports 12 million American jobs in every state in the Union and every state but one counts Canada or Mexico as one of their top three export markets.
USMCA recommits our North American trading partners to reciprocal free trade with the United States, addresses longstanding trade imbalances by granting American businesses greater freedom to sell their goods and services in Canada and Mexico, and incorporates modern and strengthened rules of trade and investment for North America. The agreement not only keeps most tariffs between the three countries at zero, it also does more than any prior agreement to eliminate non-tariff barriers and unfair subsidies.
According to the U.S. International Trade Commission, implementing USMCA would create 176,000 additional American jobs and further grow the United States economy by over $68 billion. This includes an estimated $34 billion in new automotive manufacturing investments and 76,000 new automotive industry jobs in the United States in the next five years.
These statistics demonstrate why Kentucky’s bourbon distillers and agriculture community are positive about the USMCA.
The agreement makes structural changes that would better protect American intellectual property. American innovators would receive ten years of protection for agricultural chemicals, pharmaceuticals and biologics.At the same time, USMCA would shorten America’s inventors’ wait for patents, preserving valuable time and dollars in getting new, innovative products to market and preventing foreign competitors from getting an unfair advantage.
The agreement would streamline customs procedures and inefficiencies at the borders, saving time and money for American businesses and consumers in all three countries.
A new digital chapter would better enable data to be transferred cross border, facilitating electronic transactions and financial services. USMCA would expand markets in Canada for American dairy, poultry, eggs and alcohol. And it contains zero tariffs on automotive imports with increased rules of origin requirements which will result in 75% North American content for new automobiles and light trucks.
Finally, passage of USMCA would give U.S. trade negotiators momentum and leverage as they continue to work on better deals with the European Union and China.
Every day of delay by Congress hurts American jobs and selling made-in-America products to customers abroad. Mexico has already approved the agreement; Canada is waiting on the United States and there is bipartisan support in Congress to approve USMCA under existing trade promotion authority.
The only question remaining is whether Speaker Pelosi is willing to put aside her impeachment obsession and stand up to the far left of the Democrat Party in Congress, who appear to be more concerned about denying this President a “victory” than actually doing the work of the American people. Now is the time to pass the USMCA, and I will continue to call on the Democrat Majority in the House to work with Republicans to give us a vote and continue this economic expansion for American workers, businesses and families.