On Senate Floor, Portman Urges House Action on USMCA

October 23, 2019 | Press Releases

WASHINGTON, DC – Today on the Senate floor, U.S. Senator Rob Portman (R-OH) highlighted the economic benefits of the U.S.-Mexico-Canada (USMCA) Trade Agreement, which will strengthen our economy and support American workers, farmers and manufacturers. Portman supports the more modern USMCA to the 25-year-old North American Free Trade Agreement (NAFTA) in part because it includes new and enforceable environmental and labor standards, a new section on digital trade, expanded opportunities for agricultural trade, and new opportunities for auto jobs in America.

A transcript of his remarks is below and a video can be found here:

“I appreciate the comments from my colleague from Tennessee about the importance of this agreement to her state. I can tell you, it’s also important to a state a little farther north called Ohio. Our number one trading partner by far is Canada. Number two is Mexico. And we want this agreement. I hear about it all the time. I’m out talking to our farmers, they’re concerned about the weather, they’re concerned about what’s going on with the China market, they’re concerned about low prices, and they see this as an opportunity. They see this as the light at the end of the tunnel. If we can get USMCA done, that expands markets for us and therefore increases our prices and gives us a chance.

“It’s the same with a lot of small manufacturers. It’s amazing how many of them depend on Mexico and Canada to be able to sell their products. This is a big deal for Ohio and it’s a big deal for our country. I’m here today to try to urge the House of Representatives to go ahead and move on this and then to urge the Senate to take it up right away. The Trump administration negotiated a good agreement. It deserves a vote. I’m a former trade lawyer, a recovering one, I’m also a former member of the Ways & Means Committee, and a former U.S. Trade Representative and now on the Finance Committee where we deal with trade. I guess the bottom line is in all those years of working with trade, it’s a complicated area. It’s a politically difficult area, but the bottom line is that we are about 5 percent of the world’s population in America. And yet we’ve got about 25 percent of the economy. And the way we do well is to sell more of our stuff to the 95 percent of the people who are outside of our borders. It should be fair. We should have a level playing field.

“That’s the context in which I look at USMCA. Does it meet these criteria where we’re able to sell more of our stuff and we have a more level playing field? Yes, it does. It’s exactly what this agreement does. So, it’s a good agreement, and it deserves to have a vote and if it has a vote, it will pass because logic, I think will prevail here. As crazy as this town is these days and as partisan as things are, the logic of this is inescapable, which is, you have the USMCA, which is a good agreement, and then you have the status quo, which is NAFTA and is not as good in any respect. If you vote no on USMCA, you’re effectively voting yes for the status quo. I don’t think that will happen. I think it will pass if we can get it the floor for a vote.  

“Taken together, our neighbors, Canada and Mexico, make up the most important foreign markets for the U.S. products. It’s not just Ohio. In fact, according to the recent data we’ve gotten, one-third of all American exports in 2019 - this year - have already gone to Mexico or Canada. Well ahead of any other foreign market. Trade with Mexico and Canada is now 12 million jobs nationally. Every single state represented here has jobs related to this. In Ohio, number one and number two, Canada and Mexico. 39 percent of our exports go to Canada alone. That’s twice the national average, by the way, so we are particularly focused on Canada and Mexico. $28 billion in trade totally. Again, that’s what I’m hearing from the farmers, manufacturers, and service providers. This is just really important for us.

“We have to be sure that because this relationship is so important, it’s built on a solid foundation. The NAFTA agreement, which is what it is built on now is 25 years old. This means that it’s outdated. This means that it has not kept up with the times. That it has to be improved. That’s what USMCA does. It says, okay, we’re in the 21st century now, we have to make some changes to this agreement. It doesn’t have the things in NAFTA that you would expect in a modern agreement. Let’s start with the digital economy. So much of our economy now operates over the internet and yet there’s nothing in the current agreement, the NAFTA, that protects this trade like our modern agreements do. Another is labor and environmental standards which are weak and not enforceable in the NAFTA agreement and in USMCA, they are. That’s a big change in and of itself.

“This is not just a name change. This is a fundamental change in the way in which we relate to our neighbors to the south and to the north. I’m going to show you a handy dandy chart I put together here that shows you some of the differences between these two agreements. The first one has to do with what’s the economic impact. The independent International Trade Commission has done a study on this. They are required to do it by law. You know what they say? They say that the new USMCA is going to create 176,000 new jobs. That’s right here, that’s the green check, that’s USMCA. NAFTA, none. So that’s a big difference right there. If you want to create more jobs, and by the way, 176,000 new jobs, 20,000 of those jobs are in the auto industry, something that is important to our country and particularly important to states like mine.

“Second, businesses in Ohio and around the country rely on these internet sales that we talked about earlier. Rules for the internet are unchanged in NAFTA and, frankly, there is no chapter in NAFTA that deals with commerce over the internet. It’s unbelievable. Well, it turns out that USMCA does. And it’s really important that it does because those small businesses that rely on access to Canada and Mexico through internet sales are going to have an easing of their customs burdens for small values of their products, they are going to have data localization protections. They’re going to have a prohibition on Mexico and Canada requiring that there be localization of the data in those countries. Finally, this prohibits tariffs on data. We don’t have that now. So all these are really important, key things that keep the economy moving. So here we are, rules for the internet economy. Check for USMCA, NAFTA doesn’t have it.

“Let’s talk a little about the enforceable labor and environmental standards. In the agreement that we have now, the NAFTA agreement there are no environmental standards or labor standards that are enforceable. None. Whereas in the new USMCA you have standards that are actually enforceable. There are consequences to it if they don’t abide by them. This is part of leveling the playing field. If you think about it, particularly with regard to Mexico, one of their great advantages has been lower labor costs and labor conditions. The inability to organize and so on. This changes that and says now you’ve got these labor standards. By the way, Mexico has already made changes to its labor laws because of the agreement that we already had with them under USMCA, which, by the way, was negotiated with these two countries and submitted back on September 30th of last year. It’s been over a year. So about time to move it. So, again, USMCA, yes, enforceable labor standards, enforceable environmental standards. NAFTA, no.

“There are some other provisions that are interesting here that lead to why this is good for the economy. By the way, the ITC also says that this agreement will increase the GDP of our country, the economic growth of our country significantly. In fact, more than the Trans-Pacific Partnership did. And remember, that was an agreement that a lot of Democrats have spoken very favorably of because of its impact on the economy. This actually increases the economy more than the Trans-Pacific Partnership would have. So, another issue that is unusual but is in this agreement and it’s very helpful to our manufacturing in Ohio and around the country is that 70 percent of the steel in vehicles made have to be made in the United States, Canada, or Mexico. This is a new standard. It’s not in the existing NAFTA at all. It’s in this one. What does this mean? More steel jobs in America, more heavy manufacturing jobs in this country. Again, check on USMCA, yes, 70 percent of the steel, NAFTA, nothing with regard to how much steel that’s to come from North America.

“It also says that with regard to the wages in Mexico, Canada and the United States, that there actually would be a minimum wage of $16 per hour. $16 per hour for about 40 percent to 45 percent of this manufacturing that we’re talking about. So any vehicle made in Mexico or anywhere else in North America has to be produced by workers making $16 an hour or more. Again, this is about leveling that playing field. Frankly, this is the kind of provision that you might normally see in an agreement that would be negotiated by a Democratic administration, not a Republican administration. To my Democrat friends who have been calling for this for years, it’s in the agreement, take a look at it. It is good for us because it’s going to result in more jobs coming to the United States of America where we have not just higher labor standards, but higher wages. 40 to 45 percent of vehicles must be made by workers earning at least $16 an hour, yes in USMCA, no in NAFTA.

“This is just another example of where this agreement is one that, frankly, addresses a lot of the concerns that Democrats have raised over the years. When I was U.S. Trade Representative, we talked a lot about these issues. We talked a lot about them in the Finance Committee. They are in this agreement. So my hope would be that Speaker Pelosi and the Democrats in the House would take this into account and at least allow this agreement to be voted on by the full House. If that happens, I can’t believe that logic wouldn’t prevail, that the status quo of NAFTA, versus USMCA wouldn’t result in us passing USMCA. All of these things are going to help.

“The one that I think has gotten the most attention in farm country is the fact that the dairy protections in Canada has been changed so we have a chance to send our dairy to Canada now from Ohio and other states like us. But it is much more than that. It’s about commodities: wheat, soybeans and corn. It’s about our proteins: beef, poultry, pork. This is one that is really going to help our farmers. That’s why 1,000 farm groups now around the country have supported the agreement. And again, what’s going on with China, with the smaller market there, with the difficult weather that we’ve had, with the fact that low prices right now for commodity crops are a real problem, this is a Godsend. It’s really needed for our farmers.

“A lot of Democrats tell me, well Rob, this is just like the NAFTA agreement in so many respects. It really is not. It’s not. It’s a different agreement. The truth of the matter is that this agreement is going to catch us up to the 21st century with regard to our important trade relationship with our two neighbors to the north and to the south. It is about improved market access for manufacturing. It’s about a level playing field with our workers and farmers. It is being sure that, again, we have the ability in the modern digital economy to be able to get a fair shake. Put these two side by side, this is a much-needed upgrade. It has to get the vote and if it does, I think it will pass. With all the improvements we talked about today, this is not just an exercise in rebranding NAFTA. This is about a new agreement that is really a big difference. And, it’s a binary choice, are you for this new agreement that is better in every respect or are you for the status quo, which is NAFTA?

“My hope is that the House will take this to the floor, if they do, I think it will pass. And I think then it will come to the United States Senate, and I’m confident here in the Senate we’re going to have the support to pass this on a bipartisan basis. What I’m most confident of is that then American workers, American farmers, American service providers are going to have the opportunity to improve their economic opportunities because this agreement is going to be good for all of them. There’s a lot of politics right now, and I get that. But, folks, this is not even an election year. So let’s finish it up this year before we get into the 2020 election year. Let’s be sure before Thanksgiving we have this agreement passed in the House and sent over here to the Senate to take a look at it. It’s too important – we need to put the American people first, put politics second, and get this done.”