Today, leaders from countries that constitute the world’s largest economies will come together for the 19th annual Group of 20 (G-20) summit in Argentina. Among a number of pressing global economic issues, there most certainly will be a robust discussion about the state and impact of free trade. Ratifying the recently negotiated United States-Mexico-Canada Agreement (USMCA) is a great way for the United States to lead by example.
After lengthy, and at times heated, negotiations, the USMCA will, once implemented, retain and strengthen trilateral free trade between our allied nations, supporting a more vibrant economy not just in the United States but across North America. The road to this agreement was not without its fair share of bumps and unexpected turns, but the agreement reached bodes well for U.S. industries and our economy.
The USMCA updates and modernizes the North American Free Trade Agreement (NAFTA) for the 21st century. It will carry on the significant economic gains each North American country has made under NAFTA while establishing provisions regarding digital trade, e-commerce and intellectual property rights. With these 21st century trade concerns now folded into the official agreement, the USMCA is poised to advance trade and market growth for the United States and our neighbors well into the future.
Fortunately, the USMCA has won broad approval from the private sector. The U.S. Trade Representative’s Advisory Committee for Trade Policy and Negotiations — with representatives from labor unions, farmers and leading American companies such as General Motors — issued a report in late October endorsing the new deal. The committee found that the agreement “promotes the economic interests of the United States” and “provides for equity and reciprocity within the automotive and capital goods sectors.”
The agreement is a positive development for businesses across the spectrum of American economy. Half of all U.S. manufacturing jobs rely on free trade, and economic sectors from energy and agriculture to the automotive industry are all bolstered by the economic efficiencies that our trilateral free-trade system provides. This also has a tremendous impact at the consumer level, since open trade among our countries helps to increase competition and lower consumer prices.
The USMCA also is good news for businesses of all sizes, including the more than 125,000 small and medium-sized businesses that rely on open, free trade with Canada and Mexico. As a matter of fact, 98 percent of the 300,000 American companies that export are small and medium-sized businesses.
The agreement is particularly important for our country’s 3 million-plus Hispanic-owned small businesses. Free trade with Mexico has helped drive a demand in the American marketplace, supporting increased economic opportunities for the Hispanic business community. This is especially true in states such as Texas, Florida and California, each of which boasts more than a half-million Hispanic-owned businesses.
There’s simply no question that trade under NAFTA resulted in positive growth for America’s economy over the past 24 years. Trade with Canada and Mexico helps support nearly 14 million jobs in the United States, with the increase in trade under NAFTA responsible for supporting nearly 5 million of those. As a nation, our gross domestic product has risen by $80 billion, thanks to NAFTA, and private-sector employment has risen by nearly 31 million jobs, or an increase of 33 percent.
Thankfully, tax cuts, regulatory reform and other pro-growth policies have boosted the economic outlook for Hispanic-owned and other businesses and workers nationwide. The USMCA would build on these efforts by maintaining the free and open lines of trade with two of our biggest allies, thereby further benefiting communities economically, in terms of both geography and demographics.
Following the G-20 summit signing ceremony for the USMCA, Congress should approve the USMCA so that the United States, Mexico and Canada can formalize this landmark agreement. American workers employed in export-intensive sectors will depend on this new agreement for accelerated economic opportunity, and it will be a boon for the American economy as a whole.
Mario H. Lopez is president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity and prosperity for all Americans.