Fort Report: Trade Agreement
In the 1980s, when Central America was engulfed by proxy wars between the U.S. and the Soviet Union, the victims were the poorest of the poor caught in a web of caste systems and competing ideologies and something in vogue called Liberation Theology. A refugee camp was founded in southern Guatemala for those escaping the violence. I went there to see if there was anything I could do to contribute in some small way to the solution. I remember very vividly that people there by necessity would burn the forest and just randomly plant corn in order to survive.
Fast forward to today when there is a stronger interplay between the agricultural economies of America and Mexico. There is a 25-year-old trade agreement between our two countries and our northern neighbor of Canada. It’s called NAFTA (the North American Free Trade Agreement). It significantly reduced trade barriers, but it also hurt American manufacturers and workers. It was absolutely necessary to modernize NAFTA for the 21st century.
This week, after months of negotiations, U.S. Trade Representative Robert Lighthizer and representatives of the U.S. and Mexican governments hammered out the final details of the United States-Mexico-Canada Trade Agreement (USMCA). It reestablished a smart and solid footing for all three peoples. In the next week, their agreement is scheduled to come up for debate on the House floor. I will vote for it. Here’s why.
USMCA will spur over $68 billion in new economic activity, creating over 176,000 new jobs after six years, including 76,000 new automotive sector jobs over five years, as well $34 billion in new auto plants born, in part, of a new rule that requires 76% of North American-made parts––up from the current 62.5%–– for a vehicle to qualify for tariff protection when moving between the three countries.
Our ag producers will be able to expand sales of American dairy, wheat, chicken, eggs, and turkey into the lucrative Canadian market. In a first for any trade agreement, the USMCA includes major sections dedicated to digital trade and digital innovation, while maintaining America’s high standards for intellectual property protection, especially for life-saving biologics. It also includes much stronger enforcement provisions to ensure compliance with all aspects of the agreement, including factory and facility inspections.
Finally, it ensures the continuity of strong labor, workplace, and environmental standards throughout the three-nation trading zone. With the requirement that workers making vehicle parts be paid at least $16 an hour, it will not only boost U.S. manufacturing, but prevent countries from using artificially low wages as an unfair trading advantage.
The USMCA does not resolve harder realities related to illegal immigration, and the trafficking of drugs and persons, which will have to be addressed separately. It does, however, do one important thing often overlooked in discussions about North American trade. As Mexican academics told me, liberalized trade has broken the reflexive earlier tendency of Mexican leaders to be anti-American. While Mexico must do much more to combat corruption, lawlessness, and the pernicious influence of drug cartels on the country’s legal, criminal, and political systems, the economic platform of USMCA creates significant possibilities for stability in the region.
Nebraska’s farmers, ranchers, and manufacturing workers will be pleased we finally have a good deal that builds upon the markets for their products. It’s not the fullness of an answer on trade, but it’s a start. And it’s proof that, amid the partisan drama in Washington, Republicans and Democrats can work across the aisle to achieve something deeply important for America and the world.