Jared DuBach, McDonough County Voice
MACOMB — Growing concerns over international trade may be alleviated in part by the Nov. 30 signing of the United States-Mexico-Canada Agreement (USMCA).
The measure is meant to replace NAFTA, the North American Free Trade Agreement that was enacted during the Clinton administration. The agreement was signed by the leaders of the three nations during the G20 Summit in Argentina.
Congressman Darin LaHood, R-Dunlap, called the signing “a positive step towards an improved trilateral trade agreement with our neighbors and is welcomed news for the agricultural and manufacturing industries in Illinois who have been hurt by uncertainty.”
“As I have stated in the past, an updated NAFTA must include Mexico and Canada, and I applaud the Trump administration for bringing them together on this agreement. I look forward to working with my colleagues on the Ways and Means Committee to ensure that the USMCA serves in the best interest of the farmers and workers across central and west-central Illinois.“
U.S. Department of Agriculture Secretary Sonny Perdue in October pinpointed that Canada and Mexico are our first and third greatest international trade partners.
“I have long said that I believe our country is located in the best neighborhood on Earth – North America – with valuable allies to our north and south,” Perdue said in a media release. “We have secured greater access to these vital markets and will maintain and improve the highly productive integrated agricultural relationship we have as nations.“
Perdue said the momentum from USMCA may lead to continued trade development with Japan, the European Union the juggernaut across the Pacific — China.
“The dominoes are falling and it is good news for U.S. farmers,” Perdue said.
According to information circulated by President Trump’s Executive Office, a main focus for the administration going into negotiations was finalizing an agreement that created more balance and reciprocity in trade than NAFTA.
The president’s outline reads: “The USMCA achieves the Administration’s key goals of modernizing and re-balancing the North American trade agreement. Throughout the renegotiations, the Administration has worked hard for freer markets, fairer trade, and robust economic growth in North America.”
Highlights
USMCA is expected by the administration to increase U.S. and regional content in automobile and auto parts through updated rules of origin. National and regional economic growth is expected to grow through the requirement that 75 percent of auto content be produced in North America. The Executive Office’s outline underscores the notion that this will “incentivize billions of dollars in additional United States vehicle and auto parts production.”
Trade rules will be put into effect that encourage higher manufacturing wages. Forty to 45 percent of automotive content must be made by workers earning an average base wage of at least $16 per hour.
USMCA requires all parties involved to adopt into law labor rights as recognized by the International Labor Organization, an Annex on Worker Representation in Collective Bargaining in Mexico and other provisions to prohibit the importation of goods produced by forced labor. The textiles industry in the U.S. may see a boost. More use of Made-in-the-USA fibers, yarns and fabrics may be promoted by limiting rules that allow for use of non-NAFTA inputs in textile and apparel trade and certain clothing components be made in the region for those finished products to qualify for trade benefits.
*With regard to agriculture, USMCA eliminates Canada’s Class 7 program that has allowed low-priced dairy products to undersell U.S. dairy products in Canada and in third-country markets. Canada will also apply equal treatment on imported wheat. New access for U.S. dairy products, eggs and poultry will also be granted by Canada. Agriculture products that have zero tariffs under NAFTA will continue to have no tariffs.
*From the environmental perspective, USMCA provides for the fight against trafficking wildlife, timber and fish. Unregulated fishing and harmful fishery subsidies will also be addressed. A chapter in the USMCA addresses sanitary and phytosanitary measures. The three countries have agreed to strengthen science-based sanitary measures while ensuring the countries maintain their rights to protect human, animal and plant health. Provisions include improving certification processes, conducting systems audits, improving transparency for import checks and a new mechanism for technical consultations.
*The digital trade chapter of USMCA prohibits customs duties from being applied to digital products distributed electronically, such as e-books, videos, music, software and games. Limitations on where data can be stores or transferred cross-border will be minimized. This is to enhance and protect the “global digital ecosystem” according to the Executive Office. Enforceable consumer protections such as those for privacy and unsolicited communications will be applied to the digital marketplace. Suppliers are to not be restricted in their use of electronic authentication or electronic signatures. This measure is intended to stimulate digital transactions.
