By Linda Dempsey
San Francisco Chronicle
September 19, 2019
U.S.-China relations have been in focus this summer, with trade negotiations in flux and tensions rising. American manufacturers agree with Congress and President Trump that China must do more to eliminate unfair trade practices and distortions. Manufacturers also rely on certainty and open, rules-based trade, so volatility and new barriers to commerce with one of our major trading partners make them less optimistic and less competitive. For those reasons, manufacturers are calling for a robust, enforceable agreement on a fairer, more open U.S.-China commercial relationship sooner rather than later.
But while manufacturers seek action across the globe, we have a trade agreement ready for congressional approval much closer to home: the United States-Mexico-Canada Agreement, or USMCA. While China has the second-largest economy in the world, Canada and Mexico, the two largest foreign purchasers of U.S.-manufactured goods, are even more important to the U.S. economy — more than the next 11 countries (including China) combined.
The two countries purchase more than a quarter of California’s total manufacturing exports and support nearly 100,000 manufacturing jobs in the state, according to data released by the National Association of Manufacturers. Put simply, California’s more than 35,000 manufacturers depend in significant part on a strong, reliable trade relationship with Canada and Mexico.
While manufacturers have seen continued growth in our trade relationships with Canada and Mexico, we have also recognized the need to update the 25-year-old North American Free Trade Agreement. Technology and innovation have reshaped the economy and the way we do business over the past quarter-century, but the NAFTA rules remain unchanged.
The USMCA addresses these issues directly, updating several key aspects of NAFTA to reflect the modern economy.
The USMCA would bolster American innovation with best-in-class intellectual property protections and enforcement provisions that are vital to manufacturers. With stronger and clearer rules to protect patents, trade secrets, trademarks, copyrights and other forms of intellectual property, the USMCA would catalyze American innovation and help manufacturers stay on the leading edge of inventions that save lives, improve communities and the environment, and support well-paying jobs.
To address advances in digital trade, the agreement includes a chapter setting rules to ensure that manufacturers can rely on digital trade without discrimination or unfair treatment. These rules are increasingly important to small businesses that use the internet as a global storefront.
The USMCA would also provide more access to Canadian and Mexican markets for American goods and remove more of the red tape that often prohibits small and medium businesses from selling their products in other countries.
The trade deal includes additional provisions that level the playing field for U.S. manufacturers by raising standards on a broad range of issues, from transparency and fair competition to labor and the environment.
The benefits would extend to every state and throughout Canada and Mexico, offering businesses across North America new opportunities to grow and expand. The economic implications of a robust and open North American marketplace are difficult to overstate. And moving this deal forward would send a strong message to China and other countries about the standards and rules needed to foster fairer, more open commercial relationships. Manufacturers and businesses across the country are calling on Congress to move quickly to ratify the USMCA.
Linda Dempsey is the vice president of international economic affairs for the National Association of Manufacturers.