Passing USMCA Must be Top Fall Priority for Congress | Citizens Against Government Waste
The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Passing USMCA Must be Top Fall Priority for Congress

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


The time has come for the 25-year-old North American Free Trade Agreement (NAFTA) to receive a much-needed update.

NAFTA was enforced on January 1, 1994, supplanting the 1988 Canada-United States Free Trade Agreement.  The agreement created a free trade zone between all three North American countries.  But as was the case with the Tax Cuts and Jobs Act amending the Internal Revenue Code of 1986, NAFTA is now outdated and in need of reform.  NAFTA contains no provisions that address internet commerce, fails to incorporate critical labor and environmental standards, and significantly harms the auto manufacturing industry.

The importance of an updated free trade deal between the three North American countries cannot be overstated.  In 2018, Canada was the top importer of U.S. goods, up 197 percent since the enactment of NAFTA, and Mexico finished second, up 537 percent.  One-third of all U.S. exports in 2019 have gone to its two neighboring countries, supporting more than 12 million jobs across the nation.

The negotiations to revise NAFTA began in August 2017, after President Trump threatened to withdraw from the trade deal if Canada and Mexico refused to come to the table.  After meeting for the seventh time, renegotiations seemed to remain at a standstill, leading to President Trump’s decision to impose steel and aluminum tariffs on Canada, Mexico, and the European Union on May 31, 2018.  When Canada retaliated with its own string of tariffs on U.S. goods, the trading partners came together once again and hashed out a “new NAFTA” on September 30, 2018.  On November 30, 2018, at the G20 Summit in Buenos Aires, Argentina, the three North American countries signed the United States-Mexico-Canada Agreement (USMCA).

In order for USMCA to be implemented, the agreement requires legislative approval from all three countries.  Mexico already approved the deal in June, and Canada has begun its ratification process. The U.S. must swiftly follow suit and begin consideration of the USMCA.  Among the reforms made to NAFTA, the USMCA will:

  • Define and enable fair and open digital commerce, including the prohibition of forced localization of computer facilities and restrictions on cross-border data flows.
  • Improve labor standards that promote higher wages and healthier work conditions.
  • Strengthens intellectual property protections.
  • Provide farmers with better access to neighboring agricultural markets and increase the export of U.S. dairy products.
  • Require 75 percent of auto parts to come from North America, a 12.5 percent increase from NAFTA.
  • Ensure that between 40-45 percent of any vehicle must be produced by North American workers making at least $16 per hour.
  • Enforce a new requirement that 70 percent of steel and aluminum come from North America.

An independent study by the U.S. International Trade Commission (ITC) found that the USMCA would boost the U.S. economy by $68.2 billion and raise employment by 176,000 jobs.  U.S. exports to Canada and Mexico would increase by 5.9 percent and 6.7 percent, separately. The ITC report states, “The model estimates that the agreement would likely have a positive impact on all broad industry sectors within the U.S. economy.”

While voices from both sides of the aisle have expressed support for USMCA, Speaker Nancy Pelosi (D-Calif.) has not yet committed to a vote, citing concerns over the enforcement of labor rules, rising drug costs, and adequate environmental protections.  As Congress comes back to Washington for the fall, support for the trade deal will only grow louder, and the question will become not if, but when USMCA is sent to President Trump’s desk.

USMCA is a necessary upgrade to NAFTA that boosts industries across the country, secures intellectual property rights, encourages an open internet marketplace, and strengthens protections for workers and farmers.  It is time for Congress to get this done.

Sign Up for Email Updates!Click Here!

View Archives

Posts by Author

Posts by Tag

Big Government (152) Obamacare (85) Congress (84) Healthcare (76) Budget (76) Waste (75) Uncategorized (56) Telecommunications (50) Internet (49) Debt (47) Technology (47) Deficit (44)