Why We Urge Approval of the New Trade Deal with Mexico, Canada
Monday, September 23, 2019
By Bryan Starr
President and CEO, Greater Irvine Chamber
The Greater Irvine Chamber stands in solidarity with the U.S. Chamber of Commerce and business organizations across the nation in support of the congressional passage of the United States-Mexico-Canada Agreement (USMCA).
The one unalterable fact that transcends any points of debate surrounding the USMCA is that the health and vitality of the economies of California, Mexico, and Canada are inextricably linked. In fact, Mexico and Canada are California’s No. 1 and No. 2 trading partners, respectively. The largest export markets for U.S. goods last year were Canada, $298.7 billion, a 5.6% increase from the previous year; and Mexico, $265 billion, an 8.5% increase.
When you realize that 10% of Orange County’s gross domestic product is generated by merchandise and services trade, largely with our two biggest trade partners, Canada and Mexico, you realize what a critical component trade is to the local economy. In fact, Orange County companies alone have exported more in goods and services than 25 other states.
Orange County exported an estimated $20.5 billion last year, with Mexico being its main trading partner and destination of its exports, $3.1 billion; followed by Canada, $2.2 billion; China, $1.7 billion; Japan and South Korea, $1.6 billion and $900 million, respectively.
Top exports from Orange County include computers and electronics, transportation equipment and material, chemicals, food, apparel, machinery, petroleum, metals, and agricultural goods.
Mexico is the largest recipient of Orange County exports, which are concentrated in high-tech sectors, including electronic components, computers, pharmaceuticals, and medical equipment.
Due to its strong economic potential, Orange County is not only an ideal gateway for international trade, but overall the region provides opportunities for its small and midsized companies to be suppliers of a wide variety of services.
Trade and exporting are critical to all Orange County businesses and are especially important for our small and medium-sized businesses that depend on a greater number of revenue streams to achieve revenue goals. With the vast majority of all companies in Orange County categorized as small (50 or fewer employees) or medium-size (51-100 employees), any disruption to trade with Mexico and Canada, our largest trade partners, would be highly detrimental to businesses individually, as well as to our local economy overall.
Imports of products and services from Mexico and Canada stimulate local spending, in large part reflecting what is being imported to the U.S. as a whole. According to the Office of the United States Trade Representative, the top import categories from Mexico to the U.S. last year were: vehicles, $93 billion; electrical machinery, $64 billion; machinery, $63 billion; mineral fuels, $16 billion; and optical and medical instruments, $15 billion. The top import categories from Canada last year were: mineral fuels, $84 billion; vehicles, $53 billion; machinery, $23 billion; special other (returns), $16 billion; and plastics, $12 billion. California trade and exports translate into high-paying jobs for more than 1 million Californians. With nearly 10% of the state’s population residing and working in Orange County, this is enormously important to our local workforce.
The three neighboring North American countries have long been linked by trade, culture, and opportunity. Knowing that our continued economic vitality, growth potential, industry strength, and jobs depend upon the health of our trade relationships with Canada and Mexico, the Greater Irvine Chamber joins with the California Chamber of Commerce, U.S. Chamber of Commerce, and our friends in Canada and Mexico to advocate for ratification of the trade agreement between the U.S., Canada, and Mexico.
The newer provisions of the USMCA offer our companies improved intellectual property and online commerce protections, as well as renegotiated elements that favorably impact the automobile supply chain and food processing.
The Greater Irvine Chamber continues to encourage our Orange County congressional representatives to vote in favor of passage when the agreement goes to the floor, which hopefully will be before the end of the calendar year.
We’re grateful for the partnerships we have with Orange County members of Congress, their understanding of the importance of trade, and their willingness to work in a bipartisan fashion with the president in order to accomplish America’s economic prosperity.
Category: Advocacy News, Chamber News, Economic News