Quick Take: Your Primer on the U.S.-Mexico-Canada Agreement
Friday, January 31, 2020
President Donald Trump signed the U.S.-Mexico-Canada (USMCA) trade agreement. The signing sends a powerful message to the world that America remains open for business.
The USMCA brings the North American Free Trade Agreement (NAFTA) into the 21st century with updated provisions for digital trade, financial services, and agriculture trade.
While no deal is perfect, USMCA’s updated rules promise real benefits to American businesses and consumers. It's disappointing that certain intellectual property provisions were removed from the agreement. Going forward, this cannot be precedent for future agreements. More than 45 million American jobs and $6.6 trillion in GDP depend on IP-dependent industries.
The USMCA couldn’t have been signed into law without bipartisan support. President Trump, U.S. Trade Representative Robert Lighthizer, Senate Majority Leader Mitch McConnell (R-KY), and House Speaker Nancy Pelosi (D-CA) deserve tremendous credit for their hard work and leadership to reach a compromise that earned support in both the House and Senate.
The U.S. Chamber has been heavily engaged every step of the way, working on multiple fronts to advance the interests of job creators across the business and agriculture communities—from the earliest days when the future of NAFTA itself was in question, to the creation of a business coalition to advance the trade agreement, to the full court press in Congress this fall.
This agreement will preserve and modernize U.S. trade ties with Canada and Mexico, which are by far the largest U.S. export markets.
Why does it matter?
Trade with Canada and Mexico supports 12 million American jobs, and 49 U.S. states count Mexico or Canada as one of their top three merchandise export markets.
Exports to Canada and Mexico support two million manufacturing jobs, according to the National Association of Manufacturers. Manufacturing supply chains knit all three countries together, making the region more competitive in the world economy.
North American trade is also critical to agriculture. Nearly one-third of U.S. agricultural exports go to Canada and Mexico.
Unlike when NAFTA went into effect over two decades ago, digital trade and intellectual property are now key drivers of sustained economic growth. The USMCA creates best-in-class rules to foster growth in the digital economy. It also includes strong enforcement tools to guard against counterfeiting and piracy.
Numbers to know:
$1.4 trillion. Trade between the U.S. and Canada and Mexico reached $1.4 trillion in 2018, amounting to $3.8 billion daily.
120,000. 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 North American neighbors.
$39 billion. U.S. agricultural exports to Canada and Mexico quadrupled from $8.9 billion in 1993 to $39 billion in 2017.
1,000. The U.S. Chamber held more than 1000 meetings with members of Congress to advance the deal.
U.S. Chamber's take:
"This agreement guarantees American workers and farmers full access to our largest export markets for years to come, and it restores certainty to trade ties that support 12 million American jobs. While no deal is perfect, USMCA’s updated rules on digital trade, non-tariff barriers, and services promise real benefits to American businesses and consumers." – U.S. Chamber CEO Tom Donohue
Category: Economic News, International Trade