Next Steps for North American Trade
Tuesday, December 11, 2018
After more than a year of negotiations, with plenty of ups and downs along the way, President Donald Trump, Canadian Prime Minister Justin Trudeau, and now former Mexican President Enrique Peña Nieto signed the U.S.-Mexico-Canada Agreement (USMCA) on November 30. This agreement – a follow-on to NAFTA – will modernize the trade partnership that has formed the basis of North American relations for a quarter of a century.
After carefully assessing the new deal and its impact on our members, the U.S. Chamber of Commerce has thrown its support behind the USMCA, which is critical to maintaining strong economic growth in the U.S. The U.S. Chamber will work with the administration and other stakeholders to address a handful of outstanding issues and secure approval of the USMCA in Congress.
A critical first step is lifting the tariffs on steel and aluminum imports from Canada and Mexico that were supposed to end once the USMCA was agreed to. These tariffs – imposed on our partners as a negotiating tactic – have invited $15 billion in counter-tariffs on U.S. agricultural and manufactured goods. Every week that the tariffs remain in place, $500 million in U.S. imports and exports are affected, inflicting significant harm on American workers, farmers, and ranchers.
We must also build support in Congress on the merits of the deal. Shortly after signing the USMCA, President Trump announced that he would be “terminating NAFTA quickly” in order to present the incoming Congress with a choice between the new agreement and no agreement. The U.S. Chamber disagree with this strategy. U.S. Trade Representative Robert Lighthizer has insisted that the USMCA was negotiated in such a way to attract bipartisan support. So essentially issuing this threat against a co-equal branch of government is neither necessary nor productive and could actually cost votes.
This is a risky gambit considering that withdrawal from NAFTA without a successor agreement could jeopardize 1.8 million American jobs. The U.S. Chamber is urging the administration to drop this threat. The USMCA is a good agreement, and the business community will help make that case to Congress.
It has been a long and, at times, a rocky path forward for North American trade relations. The U.S. is in a better place today than it was several months ago – when the future of the trilateral partnership seemed in question – but there is still a way to go. The U.S. Chamber will stay the course and continue to work toward a modern and mutually beneficial economic relationship with our two closest friends and neighbors.
Category: International Trade