Public Policy

Chamber Supports United States-Mexico-Canada Agreement

After months of negotiations surrounding the North American Free Trade Agreement (NAFTA), President Donald Trump, Canadian Prime Minister Justin Trudeau, and former Mexican President Enrique Peña Nieto signed the United States-Mexico-Canada Agreement (USMCA). This agreement modernizes trade relations between the three countries while ensuring that goods continue to flow across North America without harmful tariffs. Recognizing the importance of international trade to the US economy, Congress should swiftly ratify this agreement.   

International trade is key to the continued success of the Massachusetts and Greater Boston economies. In 2016, exports of $48.1 billion in goods and services supported 310,000 jobs in Massachusetts, including 270,000 in Greater Boston.[1] More than 10,000 Massachusetts businesses exported from Massachusetts in 2015. Furthermore, from 2007 to 2017, Massachusetts exports to NAFTA countries grew by $1.031 billion.[2] Contrary to the belief that free trade agreements have destroyed American jobs, trade between the three NAFTA nations supports 14 million U.S. jobs.[3] These numbers demonstrate the importance of preserving the free trade bloc in North America through adoption of the USMCA.

The USCMA will do more than maintain the free trade bloc created by NAFTA; it will modernize the trade relationship between the US, Canada, and Mexico. The way the world conducts business has changed significantly since NAFTA was signed in 1993.  New digital trade provisions are among the most important updates because they will guarantee the movement of data across borders, which will allow for continued growth of the digital economy in North America.

The USMCA will also allow for the continued movement of workers across borders. John Hancock, SunLife Financial, TD Bank, and MFS Investment Management are all Canadian-owned companies with a large presence in Massachusetts that rely on temporary entry for Canadian businesspeople and vice versa. Other important improvements include modernization of intellectual property regulations to protect US innovation, new labor standards that will increase the competitiveness of American manufacturers, new customs procedures that will make it easier for small business to conduct international trade, and increased access to Canadian markets for American dairy farmers.

In order to ensure full ratification, the Trump Administration should lift its tariffs on steel and aluminum imports from Canada and Mexico. These tariffs, made under unsound logic of protecting national security, have created unnecessary tension with our trading partners and have resulted in retaliatory tariffs. Lifting these tariffs is the only way to demonstrate to Canada and Mexico that the USMCA will be the governing agreement for future trade in North America.

Companies in all three NAFTA countries have spent the past 25 years working together and integrating their supply chains. As a result, on average, U.S. imports from Canada contain 25 percent American content and imports from Mexico contain 40 percent American content.[4] Ratifying the USMCA will ensure that all three economies continue to benefit from an alliance that has promoted economic growth across North America.

 

[1] Brookings, Export Monitor 2017, October 2017.

[2] International Trade Administration, Department of Commerce, Massachusetts Exports, Jobs, & Foreign Investment, February 2017.   

[3] US Chamber of Commerce, The Facts on NAFTA, 2017. 

[4] US Chamber of Commerce, The Facts on NAFTA, 2017.