Democrats and the trade deal
Time is running out, and Democrats are dragging their feet on the new North American trade deal. They’d rather focus on impeachment. Americans disagree.
It might be — in the Democrats’ eyes — a short-term political win, but tanking the U.S. Mexico Canada Agreement (USMCA) would cause lasting damage U.S. producers — including Texas farmers and ranchers.
Let’s be clear: It’s the District of Columbia that is consumed with impeachment talk and political posturing. The Democrats make a serious mistake if they think scuttling the free trade deal will win them any points in the heartland — in the districts they say they represent.
Outside of Washington, the rest of us are far more concerned with living our lives. The holidays are coming up; we have gifts to buy, trips to budget for and meals to plan. Failure to pass the USMCA could affect all of those.
More fundamentally, Texas and American exports are threatened by congressional inaction. In 2018, Texas exported $109.7 billion in goods to Mexico, with another $27.5 billion to Canada. Nearly 40,000 Texas companies are involved in the export business, and according to the latest numbers, nearly 1 million Texas jobs are export-supported.
And by the way, these are good jobs, paying an estimated 18 percent above average.
Yet agriculture in particular is struggling. According to the Texas Farm Bureau, “net farm income [is] less than half of the levels recorded in 2013,” and that’s why “passage of USMCA is a desperately needed trade win.”
Beef producers, for example, rely on the carefully developed markets in Mexico and Canada. In 2018, American beef exports to those two countries totaled $1.8 billion, adding $70 per head in value.
It’s not just farmer and ranchers in peril. Reuters recently reported on the aluminum pistons GM uses in its V-6 engines. Aluminum from Tennessee goes to Pennsylvania for manufacture; the rods are then shipped to Canada for shaping, then to Mexico for assembly. The final manufacturing destination is Romulus, Michigan, where they’re installed in the engines, which go into cars and trucks.
The North American Free Trade Agreement enabled these complex but ultimately advantageous networks to flourish. USMCA would allow them to continue.
So where are Democrats on the issue?
“Battleground” Democrats say they’re for it; they recognize the danger of shunting aside the issue of trade (and the jobs and prosperity that come with it) in favor of focusing exclusively on Washington political in-fighting. As Texas Rep. Henry Cuellar said following a recent meeting, “Nobody wants to just talk about impeachment.”
Some Democrats are stalling on the USMCA on behalf of unions. But unions don’t represent the vast majority of American workers (just 10.5 percent of U.S. workers were members of unions in 2018, and more than a third of those were members of public sector unions).
Impoverishing American farmers, ranchers and other producers at the behest of union bosses doesn’t make political sense — even in a Democratic primary season, despite the din of the impeachment hearings.
Yet a sizable contingent of Democrats think that impeachment monomania is the right political strategy. Nothing could be further for the truth — at least outside the Washington bubble. It’s a contemptable and opportunistic position. It shows a willingness to trade the well-being of the American economy (as Bill Maher advocated last summer) — and therefore American families — for brief political gain.
There’s a cost to be paid for Democratic intransigence on the issue, just as there’s a cost to be paid for intransigence on immigration and the border wall. On trade, American families will pay the price, just as immigrants themselves pay the price for Democratic refusal to countenance a secure border.
There’s absolutely nothing stopping Congress from approving the trade deal, except a decision not to act. The USMCA needs 218 votes to pass in the House; Cuellar believes that with the border state Democrats siding with the Republicans, the votes are already there.
Impeachment may be consuming the capitol. But Democratic leaders are wrong if they think it has distracted everyday Americans enough to excuse their inaction on things that matter — like trade and jobs. It’s time for member of Congress to do their jobs and pass the USMCA.
Kevin Roberts, Ph.D., is executive director of the Texas Public Policy Foundation.
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