This Association was honored to be named in an Omaha World-Leader editorial recently as a trade association supporting passage of the United States-Mexico-Canada Agreement, or USMCA, which is the successor agreement to NAFTA.
The Association is among more than 600 U.S. industry associations, farm organizations and chambers of commerce who are part of the USMCA Coalition. We added our name to a letter to Congress recently urging ratification.
Your federal lawmakers are in their home districts this month, and we are asking you to join us in this message: USMCA is essential to this industry, and lawmakers’ quick attention is urgently important.
Here’s a portion of the letter to Congress: “U.S. manufacturers export more made-in-America manufactured goods to our North American neighbors than they do to the next 11 largest export markets combined, and (Canada and Mexico) account for nearly one-third of U.S. agricultural exports.”
The two countries, the letter says, “are the top two export destinations for U.S. small and medium-size businesses, more than 120,000 of which sell their goods and services to Canada and Mexico.”
Agricultural associations support passage of the agreement because without approval—and discussion of a potential withdrawal from NAFTA—the open-market conditions in place for decades would be jeopardized. The USMCA, the American Soybean Association says, “maintains zero tariffs on U.S. soybeans and soy products and”—in an improvement over NAFTA—“provides the highest enforceable sanitary and phytosanitary standards of any trade agreement to date.”
The revised trade agreement now before Congress would maintain the existing free trade benefits under NAFTA and make improvements in several ways, including:
• Facilitating e-commerce. NAFTA, which took effect in 1994, didn’t address the issue.
• Strengthening protections for intellectual property, including patents, copyrights and trade secrets.
• Enabling significant efficiencies in customs processing.
• Facilitating greater financial services trade.
Because NAFTA already removed most tariff barriers among the three countries, the USMCA isn’t expected to produce huge gains in U.S. economic output or jobs. After six years, the new accord would increase U.S. economic output by an estimated $68.2 billion, or between three-tenths and four-tenths of a percent, according to the International Trade Commission. U.S. employment, the commission said, would rise by just over a tenth of a percent.
On balance, however, the USMCA is a net positive for our country, as the industry associations make clear. The agreement preserves free trade with Canada and Mexico, two vital markets for our exports.
Resolution of the pact also would offer stability during this era of difficult negotiations in international commerce. In surveys such as the Ag Economy Barometer and Rural Mainstreet Index, which appear regularly in this newsletter, we have seen dramatic swings in sentiment among bankers in rural America as well as farmers and ranchers. Their moods are often dependent upon the latest development on a series of fast-moving issues. A ratified USMCA would preserve free trade and offer assurances to an industry in search of it.
Sources: Omaha World-Leader, Association staff