USMCA Is Good for California’s Economy and Good for Trucking
Wednesday, October 16, 2019
Southern California receives many blessings by virtue of its latitude. Sunny weather and beautiful beaches make this corner of the country one of America’s natural treasures. But its location on the map has an even greater significance than its panoramic beauty, making it a pivotal part in our nation’s economic engine.
As a key border state and home to our largest port, Southern California is a vital gateway of global commerce essential to the prosperity of the United States. That is why it is essential for California’s Congressional delegation to be a leading voice in support of the United States-Mexico-Canada trade pact when it comes before the Congress in the coming weeks.
Californians know as well as anyone the value of free and fair trade. Forty percent of all U.S. imports come through Southern California, supporting some 4.4 million jobs, according to the Business Roundtable. Truckers know the importance of trade, too. We see trade in motion every single day.
Eighty-two percent of the total tonnage of goods manufactured in California are moved by trucks. In servicing factories, farms and stores up and down the West Coast, truckers know what access to Mexican and Canadian markets does to stimulate business and create good-paying jobs. Every single day, there are a staggering 33,000 truck entries along our northern and southern borders hauling more than $2 billion of goods.
Nowhere is this more visible than in Southern California, one of the largest points of entry for trucks crossing between the U.S. and Mexico. Last year, truck-transported trade of goods with Mexico, as measured by the value of the goods, accounted for 84% of total surface-transported trade, imports and exports, across the southern border. The two largest commodities were electrical machinery and computer-related machinery, which combined to make up 44% of goods going into Mexico via trucks.
Cross-border trade with our neighbors has become a cornerstone of the American economy, with Mexico and Canada purchasing more U.S.-made goods than our next 10 trading partners combined. Since 1995 and the enactment of NAFTA, U.S. exports to Mexico by truck have grown an impressive 393%. In that same time, the value of these goods traveling via truck across both the northern and southern borders has jumped 191% and totaled more than $772 billion in 2018 alone.
This increase in trade has directly created or supported tens of thousands of trucking jobs in the United States and has provided a steady stream of business to California’s trucking industry, which employs more than 710,040 people across the state.
But at twenty-five years old NAFTA – the oldest of our 17 international trade agreements – is showing its age. A quarter century after it was first written, its labor and environmental standards are now woefully inadequate. Technological advances have dramatically changed how business is done. In 1994, the Internet was in its infancy, and trade did not accommodate same-day shipping or two-day delivery that is often expected today.
As the supply chains between our three nations grow more connected and interdependent, the USMCA represents a timely and necessary update. It will help the trucking industry maintain market access and continuity of cross-border operations.
This comprehensive, twenty-first century trade agreement preserves and builds upon the current trilateral framework to solidify North America’s role as the most competitive and successful trading bloc in the world.
Ratification of the USMCA will provide occupational certainty to the nearly 90,000 Americans in the trucking industry, including approximately 60,000 truck drivers, whose livelihoods depend on continuous cross-border freight movements between the U.S., Canada, and Mexico. Just as important, it will provide certainty to our customers: American factories, farmers, retail store owners, and all consumers.
In the coming weeks, Washington will likely remain consumed in contentious political debates, but lawmakers must find the means to fulfill their legislative obligations and keep free trade humming—and the economy moving—by passing the USMCA. If we neglect to modernize the current NAFTA framework, we risk sending more production and jobs overseas and irreparably reducing the flow of freight across the continent. The trucking industry depends on these critical relationships with Mexico and Canada, as does our economy as a whole.
It is clear this agreement is a considerable improvement over the current, 25-year-old NAFTA. If brought up on Capitol Hill, it has the votes to pass. It is now time for Congress to do its job and bring certainty to our economy by ratifying USMCA.
Category: International Trade