Vice President Mike Pence visited one of Northeast Pennsylvania’s long-time manufacturers, Schott Advanced Optics in Duryea, urging congressional approval of a trade agreement with Canada and Mexico, the USMCA. U.S. manufacturers have thrown their full weight behind the negotiated agreement; it will add billions to the economy and create thousands of high paying manufacturing jobs.
USMCA, sometimes referred to as NAFTA 2.0, was signed by the leaders of all three countries a year ago, but legislation to ratify the deal in the U.S. has been languishing in the House of Representatives since then. This while the agreement won easy approval in Mexico’s Senate in June, and ratification by Canada’s Parliament is all but assured with approval by Congress. But the Vice President and manufacturing leaders warn that time is running out for the House to act. No hard deadline exists, but the House is increasingly occupied with impeachment proceedings, and next year members will be focused on re-election efforts.
“Call your congressman now and urge them to pass this legislation,” Pence said during his Schott visit, hosted by the National Association of Manufacturers (NAM), with support from the PMA and the Northeast PA Manufacturers & Employers Association (MAEA). The visit also commemorated Schott’s 50 years of manufacturing glass products at the location.
The potential benefits of the new trade deal, outlined by the Vice President, are staggering.
“According to the International Trade Commission, the USMCA is going to add more than $68 billion to our economy, right out of the gate,” Pence said. “And they project it’s going to create another 175,000 jobs. That includes nearly 50,000 good manufacturing jobs.”
“And again, we’re not just talking about creating more jobs but better jobs,” he continued. “According to the same report, under the USMCA, American manufacturing workers are going to get another raise in addition to the wage increases you’ve already seen under the policies advanced by this administration.”
NAM President and CEO Jay Timmons, PMA President & CEO David N. Taylor, and MAEA President Darlene Robbins said that approval of USMCA is vital because Canada and Mexico buy more U.S.-manufactured goods than the next 11 countries combined.
“That’s why manufacturers are raising our voices in unison, calling on Congress to ratify this agreement and provide businesses with a level playing field and certainty to compete, grow and win in the global market,” the manufacturing leaders said.
In Pennsylvania, more than 42,900 manufacturing jobs depend on exports to Canada and Mexico, according to statistics compiled NAM. The jobs are typically full time and pay higher-than-average wages.
For example, Pennsylvania’s exports of industrial chemicals and electrical equipment to Canada and Mexico have increased by more than 60 percent over the last decade.
Without UMSCA, Pennsylvania’s manufactured goods exports to Canada and Mexico could face a minimum of $244 million to $1.7 billion in extra taxes (compared to zero tariffs today), NAM noted. The result will be lower production and fewer American jobs in the face of competition from Europe and Asia, whose companies will continue to export to Canada and Mexico without tariffs.
Some of the highlights of the changes to the 25-year NAFTA agreement include the requirement that cars must have 75 percent of their components manufactured in Mexico, the US, or Canada to qualify for zero tariffs. That’s up from 62 percent under NAFTA.
In addition, just under half of car parts of automobile parts must be manufactured by workers who earn at least $16 an hour by 2023. And under the deal, farmers in the U.S. will have more access to Canada’s dairy market.
The agreement also improves protections for manufacturers. For example, the deal extends the period of time that a pharmaceutical drug can be protected from generic competition, and includes new provisions that recognize a digital economy, including banning duties on digital music and e-books, and liability protections for internet companies not responsible for content added by users.
UMSCA discussions between the Office of the U.S. Trade Representative and House Democrats are ongoing, with the Democrats insisting they are delaying action on the deal out of labor and environmental concerns, not because they’re reluctant to give the Trump Administration a legislative victory.
Last month House Speaker Nancy Pelosi all but promised a vote on USMCA.
“We’re moving ahead on USMCA hoping to be on a path, a continuing path to ‘yes,’” Pelosi told Capitol Hill reporters in late September.
The Senate is eager to move on the legislation. Republican Senate Majority Leader Mitch McConnell along with House Minority Leader Kevin McCarthy (R-Calif.), wrote in a recent commentary in the Wall Street Journal said that the USMCA should be a bipartisan victory, one that will strengthen our alliances with the two countries in the face of our tough stance with China.
“President Trump and the leaders of Canada and Mexico announced the most significant trade deal in a generation a year ago this week,” the congressional leaders wrote. “The U.S.-Mexico-Canada Agreement is unambiguously a win for America. It would create new jobs, expand export markets, strengthen protections for workers, and generate billions of dollars in new prosperity. The USMCA would also help keep North American partners close while the U.S. hangs tough with China.”
“Ratification of USMCA is urgently needed to begin a new, more prosperous era with Pennsylvania’s two largest international trading partners,” said PMA’s David N. Taylor. “The votes to ratify USMCA are present in both chambers of Congress, if Speaker Pelosi allows that vote to occur.”