Trade Cases

Support Tenuous for New USMCA

Written by Sandy Williams

Some government and industry leaders praised the new U.S.-Mexico-Canada Agreement that was signed by the three nations on Friday, while others remained critical of the trade pact, suggesting it was a missed opportunity to remove the Section 232 tariffs on Canada and Mexico.

Incoming Speaker of the House Nancy Pelosi called the agreement a “work in progress,” adding, “This is not something where we have a piece of paper we can say yes or no to.”

The United Steelworkers said the “signing is an important milestone, but it is only another step in the process to reform NAFTA.” The union urged continued work to “ensure that Mexico adopts strong workers rights provisions and monitors and enforces their implementation.”

The United Auto Workers also urged changes in Mexican labor laws that would stop the flow of manufacturing beyond the southern border. UAW President Gary Jones issued the following statement: “Before the ink hit the paper, General Motors has already signaled that the ‘New’ NAFTA (known as USMCA) is not strong enough, as it stands today, to deter them from moving products and taking advantage of low-cost labor. Quite simply, the ‘New’ NAFTA needs more input and more work. We were hopeful that this new agreement would rein in the corporate greed that has bled manufacturing in the United States. Unfortunately, as GM’s idling of plants in Ohio, Michigan and Maryland this week showed – the ‘New’ NAFTA, as it stands now, is not strong enough to protect American workers.”

Thomas J. Gibson, president and CEO of the American Iron and Steel Institute praised the new agreement: “The NAFTA has provided significant benefits for the American steel industry by promoting the development of manufacturing supply chains in North America, especially with key customer groups like the automotive industry. The new agreement builds on this success by establishing new rules of origin that will further incentivize the use of North American steel in the manufacturing of automobiles and other steel-intensive goods in North America.” 

The Coalition of American Metal Manufacturers and Users (CAMMU) expressed disappointment that the signing of the U.S.-Mexico-Canada Agreement did not include the termination of Section 232 steel and aluminum imports from Canada and Mexico. “A golden opportunity was missed today to improve upon the Trump administration’s self-destructive 232 tariff scheme,” said CAMMU spokesperson Paul Nathanson. “Thousands of manufacturing companies around the country must today cope with price hikes, delivery delays and the outright unavailability of the steel and aluminum they count on to make their businesses operate.”

“By cutting itself off from the global steel market, the U.S. has become an island of high steel prices,” added Nathanson. “The result of this policy is simple: American steel-using manufacturers cannot successfully compete against foreign competitors able to purchase steel at world market prices outside this country. President Trump must lift the tariffs on steel and aluminum or risk undermining the broader U.S. economy.”

The transportation sector was pleased that the agreement lifted any uncertainty regarding cross border trade in North America and called for the agreement to be ratified by Congress.

“The private freight railroad industry congratulates leaders from Canada, Mexico and the United States for signing the U.S.-Mexico-Canada Agreement (USMCA) today, an important step in preserving free trade across North America,” said Edward R. Hamberger, President and CEO of the Association of American Railroads. “The seamless movement of goods between our nations – via private railroads, as well as trucks – makes our economies stronger and more competitive. The U.S. Congress should work to quickly ratify the modernized accord to provide market certainty and stimulate further investment in industry and workers.”

American Trucking Associations President and CEO Chris Spear issued the following statement: “We commend the Trump administration, Canada and Mexico for coming to an agreement to keep our nations’ borders open to trade and commerce. Signing this improved trade agreement will strengthen America’s relationships with our nearest neighbors and put us all in a position to grow the North American economy. That economic growth will be a boon to the American trucking industry – which already moves 82 percent of the freight that crosses the Mexican border and 68 percent that crosses our border with Canada – as well as to consumers in all three countries. We urge Congress and their counterparts in Mexico and Canada to quickly ratify this agreement so we can begin reaping its benefits.”

Trump Says He Will Terminate NAFTA

On Saturday, President Trump told reporters that he will be “formally terminating NAFTA shortly.” By doing so, Congress will have the choice to ratify the new agreement, said the president, or choose “pre-NAFTA, which works very well.” A new deal or no deal conundrum.

“We get rid of NAFTA,” Trump said. “It’s been a disaster for the United States. It’s caused us tremendous amounts of unemployment loss and company loss and everything else.”

The 1994 NAFTA agreement terms allow the president to give a non-binding, six-month notice of withdrawal. Congress, however, says it would need to repeal the NAFTA legislation before the agreement can be fully terminated.

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