USMCA: A bipartisan victory for our economy
The media paints the picture of a Washington gripped by gridlock and division. But here’s what’s missing from the headlines: Congress is on the verge of securing a major bipartisan victory for our economy.
On Thursday, the House of Representatives passed the United States-Mexico-Canada Agreement (USMCA), bringing us one step closer to finalizing a trade pact that will update North American trade rules and support more than 12 million U.S. jobs. This historic deal is a win-win-win for all three countries involved. While not perfect, USMCA is a good agreement that will strengthen many sectors of our economy—from agriculture and manufacturing to service providers and small business. As the Senate prepares to take up the deal early next year, we urge lawmakers on both sides of the aisle to remember what’s at stake.
America’s farmers are ready for this deal to get done. U.S. agricultural exports to Canada and Mexico quadrupled from $8.9 billion in 1993 to $40 billion in 2018. And today, nearly one-third of all U.S. agricultural exports go to Canada and Mexico. After the announcement of a handshake deal, farmers and ranchers breathed a collective sigh of relief with the knowledge that their products will continue to flow across the northern and southern borders tariff free.
The same goes for America’s manufacturers, the majority of whom count Canada or Mexico as their first- or second-largest foreign purchasers. With declines in the ISM Manufacturing Index fueling talks of an industry contraction, the timing of the House’s vote on USMCA could not have been any better. This agreement will boost confidence for U.S. exporters by removing the threat of tariffs, and it will support the more than 2 million manufacturing jobs in our country that depend on North American trade.
America’s financial services providers also stand to benefit. USMCA will ensure a level playing field for U.S. financial institutions, investors, and investments in financial institutions. Likewise, USMCA will support business services by creating best-in-class rules to foster expansion and innovation in the digital economy. For example, it will guarantee the freedom to move data across borders and prohibit the forced localization of data, thereby ensuring continued growth.
Additionally, USMCA also will be a boon to businesses of every size, including small and medium. Consider that Canada and Mexico are the top two export destinations for U.S. small and medium-sized enterprises, more than 120,000 of which sell their goods and services to our two North American neighbors. USMCA seeks to grow that number by cutting red tape and streamlining customs procedures to allow American companies greater access to foreign markets. The deal is the first U.S. trade agreement to include a chapter focusing specifically on small and medium-sized exporters. This chapter aims to promote cooperation between the U.S., Canadian, and Mexican governments to increase trade and investment opportunities for smaller firms.
Of course, no deal is perfect — including this one. While the current draft of USMCA contains provisions that will benefit our economy as a whole, it also misses critical opportunities on intellectual property (IP) reform. At the 11th hour, important IP protections were removed that would have advanced innovation and research in the biopharmaceutical industry. In this area, USMCA cannot stand as a precedent for future agreements. That’s why the U.S. Chamber of Commerce is doubly committed to maintaining American leadership in intellectual property creation by protecting it in law and in agreements at home and abroad.
Even with its shortcomings, USMCA is a strong deal overall that represents a hard-fought bipartisan victory. We thank the administration and policymakers on both sides of the aisle for their leadership and hard work in shepherding this bill through Congress. We now call on senators—Republicans and Democrats alike—to do what’s best for the economy and for all Americans: Vote yes on USMCA.
Thomas J. Donohue is CEO of the U.S. Chamber of Commerce.
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