By Adam Gregg, Jeanette Nuñez and Matt Pinnell, Opinion Contributors
July 1, 2020
For years, the United States of America had the great need for better trade policies with Mexico and Canada. Starting today, the Trump administration is delivering on the promises made — and now, it falls upon state leaders to ensure we have the strongest economy possible to keep our country on track toward long-term, sustainable success.
Though we have faced unparalleled economic adversity in recent months, there remains light at the end of the tunnel thanks to President Trump’s United States, Mexico, Canada Agreement (USMCA); open trade markets rejuvenate the economy and foster expanded opportunities for our states’ exports. Perhaps the most important aspect of the deal is that Americans from all walks of life will benefit from a more favorable economic environment and increased job growth.
The USMCA, which takes effect today, protects free trade, limits tariffs and institutes further protections on modern issues not addressed properly by the North American Free Trade Agreement (NAFTA), including intellectual property and digital trade. Leaders across the country anticipate “more balanced, reciprocal trade,” which in turn will lead to “freer markets and robust economic growth.” And it comes at a critical time — now, more than ever, our country needs support for our small businesses and our economy.
Republicans at every level of government consistently demonstrate a commitment to cutting through the noise to enact commonsense policy reforms. Federally, the trade deal has provided a vital update to the 25-year-old NAFTA. While NAFTA was a necessary trade deal for its time — Mexico and Canada are our greatest export partners — there were much-needed improvements to be made. Like anything else, the environment has changed and evolved, and that is why it was critical to modernize our efforts.
This agreement comes with significant benefits for our country, including no fees or tariffs being placed on small, low-dollar shipments. Cars will be shipped without tariffs if an eventual 75 percent or more of the parts are manufactured in America. New mandates include ensuring that 70 percent of steel and aluminum for cars are made in North America.
The USMCA is ushering in jobs for blue-collar areas that were previously decimated, redefining what it means to be “Made in America.” Cities from Cedar Rapids, Iowa, to Sharon, Pa., will come roaring back to life under this agreement.
Officially entering the agreement will spark an economic recovery on the continent that could not have come at a better time. We are on the cusp of changing the trajectory of our coronavirus-impacted economy, and we have Republican leaders to thank. Every industry, including agriculture, manufacturing, textile, pharmaceutical and automotive, will benefit from the continued protection of free trade.
Agriculture is what puts food on the table, literally and metaphorically, and we must have an economic environment that supports our ranchers and farmers.
The state of Iowa alone had $6.6 billion of exports to Mexico and Canada in 2018. According to the National Association of Manufacturers, “Iowa’s small- and medium-sized businesses comprise 81 percent of the state’s exporters of machinery to Canada and Mexico, and 76 percent of the state’s exporters of transportation equipment to Canada and Mexico.” We must continue to capitalize on this growth to ensure that our communities are thriving and the economy is healthy.
Florida farmers, manufacturers and other producers exported $7.1 billion in products to Canada and Mexico in 2018. In the same year, Florida’s GDP topped $1 trillion — if Florida were an independent country, it would have the 17th largest economy in the world. While COVID-19 has had a negative impact on industries in Florida, bolstering free trade will strengthen its already-large economy by enabling better practices.
Oklahoma had $2.4 billion in exports to Canada in Mexico in 2018. We expect this deal to expand exports of almost every agriculture product. Under USMCA, American-grown wheat will no longer be downgraded by Canada and can be marked for human consumption — this will vastly open the market to American wheat producers whose grain was only marked as feed-grade grain in Canada. This now-obsolete, unfair practice completely devalued American farmers’ hard work, and we are thankful for the improved communication and accepted standards between our countries.
The U.S. International Trade Commission predicts that the USMCA will increase U.S. annual agricultural exports by $2.2 billion. Additionally, the USMCA is projected to add $68.2 billion to the U.S. economy and spur 176,000 jobs across the country — and that is only the beginning of the positive news that will come from this trade deal.
This agreement is exactly what the American people need, and something that Republicans and Democrats alike can — and should — rally around. Thanks to the hard work of President Trump and Republicans across the country, Americans will reap the benefits of this great trade deal for years to come.
Lt. Govs. Adam Gregg of Iowa, Jeanette Nuñez of Florida and Matt Pinnell of Oklahoma are members of the Republican Lieutenant Governors Association, a caucus of the Republican State Leadership Committee.