As Congress reconvenes this week, we’ll have a choice to make - stand by an outdated, 25-year-old North American Free Trade Agreement, or vote to pass the U.S.-Mexico-Canada Agreement, a modern trade agreement that will create thousands of new American jobs. Democrats should be leading the charge for its passage, because they have long criticized NAFTA, and because the USMCA addresses the major concerns they have raised with NAFTA. The new USMCA adopts long-held Democratic positions on jobs, labor and environmental standards, as well as other issues.
That’s why, if Speaker Nancy Pelosi, D-Calif., were to bring USMCA to the House floor for a vote, I am confident it would pass. And I know the Senate would quickly follow suit.
Taken together, Canada and Mexico make up the most important foreign market for U.S. products, fueling economic growth here at home and supporting export jobs that pay, on average, 16% more than equivalent jobs that produce only for our domestic market. According to the most recent data, one-third of all American exports in 2019 have gone to Mexico or Canada, well ahead of any other foreign markets. In all, trade with Mexico and Canada supports more than 12 million jobs nationwide.
With so many jobs and livelihoods at stake, our trade relationship with our neighbors must be built on a healthy foundation. It’s been 25 years since we entered into NAFTA, and it must now be updated to reflect our 21st-century economy.
For example, billions of dollars in trade occurs over the Internet every day, but unlike our more modern trade agreements, NAFTA contains no provisions to ensure an open and secure digital economy. The USMCA corrects that by easing customs burdens for small businesses - especially those that sell online - that export small value products to Canada and Mexico. It also prohibits data localization and tariffs on data, key things that keep our Internet economy moving.
Though NAFTA has promoted greater economic growth since its passage, U.S. workers in some sectors, such as auto manufacturing, haven’t always felt those benefits. Labor and environmental standards that were negotiated a quarter-century ago are now outdated and there is no way to enforce them. In their place, the USMCA requires stronger, more enforceable labor standards to help level the playing field on labor costs between the United States and Mexico.
In fact, the USMCA goes further than any other trade agreement by requiring that between 40% and 45% of any vehicle made in Mexico or anywhere else in North America has to be produced by workers making at least $16 an hour. Democrats who have advocated this over the years should be hailing it as a breakthrough. The agreement requires USMCA-compliant autos and auto parts to have a higher percentage of U.S. and North American content: Under NAFTA, that content requirement is 62.5% - under USMCA it’s 75 %, the highest of any U.S. trade agreement. This means more auto parts jobs in the United States. There is also a new and unprecedented requirement that 70% of the steel purchased is from USMCA countries.
The USMCA will also provide U.S. farmers with better access to new markets in Canada and Mexico. That’s why nearly 1,000 agricultural groups support the agreement. In every part of the country, farmers badly need these new markets at a time when farm country is hurting with low prices, a shrinking China market and bad weather.
When Democrats say that the USMCA is just like the NAFTA agreement they oppose, they’re ignoring the facts to score political points. According to a study by the independent International Trade Commission, because of these USMCA improvements over NAFTA, wages will rise and we will add 176,000 jobs to the U.S. economy, including more than 20,000 in the auto industry. In fact, it will grow our economy by double the gross domestic product of that projected under the Trans-Pacific Partnership, which many Democrats praised a few years back for its potential economic impact.
Passing the USMCA will help the U.S. compete in today’s 21st-century economy. A vote for the USMCA is a vote for improved market access, more U.S. manufacturing, and a level playing field for American workers and farmers. A vote against the USMCA is a vote for the status quo of unenforceable labor and environmental standards, nonexistent digital economy provisions, and outdated rules of origin provisions that allow more automobiles and auto parts to be manufactured overseas rather than here in America. Put these two agreements side by side and it’s clear: The USMCA is a much-needed upgrade.
Over the next several weeks, Democrats must decide whether they support the NAFTA deal that they’ve long criticized, or the better USMCA pact that is ready to go, having already been signed by all three countries. There will be plenty of time for politics between now and the 2020 election. This fall, let’s work together to put the American people first and pass this agreement.