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April 15, 2019

What Would The USMCA Mean For Manufacturing In The U.S. States?

The United States, Mexico, Canada Agreement (USMCA), a trilateral free trade agreement designed to replace the North American Free Trade Agreement (NAFTA) is awaiting ratification by the U.S. Congress and Canadian Parliament. As Connecting the Dots has written previously, lawmakers in both countries have warned they are unwilling to consider the USMCA until U.S. President Donald Trump eliminates his Section 232 tariffs on steel and aluminum imports into the United States.

That hurdle isn’t the only one the pact faces, however, in the United States at least. U.S. House Ways and Means Committee Chair Richard Neal (D-Mass.), whose committee oversees trade policy in the lower chamber of Congress, sent a letter last week to U.S. Trade Representative Robert Lighthizer that outlined Democrats’ concerns about the USMCA’s labor and environmental standards, asking whether they are enforceable. Chairman Neal explained Democrats had the same concerns with NAFTA since its inception.

The letter said, “Congressional Democrats concerned whether trade agreement labor provisions will be meaningful have always been required to take a leap of faith: vote first and hope to see changes later. This time needs to be different.” (As Politicoreported, however, the Mexican government soon will pass major labor reform that could ease Democrats’ concerns about those issues. House Speaker Nancy Pelosi has said her caucus will need to see how Mexico implements those changes before she will allow a vote on the USMCA in the House, however.)

Supporters of the USMCA argue it will create jobs and boost economic growth. Last week, the National Association of Manufacturers (NAM), which supports ratification of the agreement, issued fact sheets for each U.S. state outlining the benefits of the trade deal in those individual jurisdictions.

Click here to see how your state would fare.

In a national fact sheet, NAM argued the continued success of U.S. manufacturing depends on our critical North American partnerships because:

  • Canada and Mexico alone purchase one-fifth of the total value of U.S. manufacturing output.
  • Canada and Mexico purchase more U.S.-made goods than our next 10 trading partners combined despite representing only six percent of the world’s population.
  • The jobs of more than two million American manufacturing workers depend on exports to Canada and Mexico, along with more than 43,000 small and medium-sized businesses.