At Committee Hearing, Portman Highlights Urgent Need for Congress to Pass the US-Mexico-Canada Trade Agreement

July 30, 2019 | Press Releases

WASHINGTON, DC – Today at the Senate Finance Committee hearing, U.S. Senator Rob Portman (R-OH) highlighted the economic benefits of the U.S.-Mexico-Canada (USMCA) Trade Agreement, which will help 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:

Portman: “I think this is a great hearing to build on the momentum to try and get USMCA done. Because one my colleagues had a chart earlier, I figured we have to have the dueling charts up here so, what the heck, I thought we’d bring one too and Sam’s doing an awesome job holding that up. A little bit more to the left. Perfect. The reason I like USMCA better than NAFTA is that it does modernize an agreement that’s 25 years old, one, and so things like the digital economy, which Ms. Barnett has talked about today, we have to upgrade it. That’s done and I think that’s going to be very helpful. We talked earlier about the de minimis threshold, we didn’t talk about the fact that both Mexico and Canada both agreed to raise their de minimis threshold. Not as much as I’d like but again, the alternative is NAFTA. Or I guess, you could say nothing. I think the alternative is NAFTA because I think that’s what we’re stuck with. I don’t think there’s any way for the president to actually pull out of NAFTA at the end of the day because it’s a law. And although this would be a case of first impression, that’s what most of the lawyers tell me.  

“As a former U.S. Trade Representative, I also like the fact that we now have some standards that we can turn to for labor and the environment. We have these in all of our more modern agreements but not in NAFTA, which is 25 years old. We can talk about enforcement but folks, the choice is not about enforcement or not. It’s about whether you even have the standard at all that is enforceable. And in NAFTA we don’t and in USMCA we do.  

“The market access for farmers in Ohio is very important to me and that’s why our ag community is strongly supportive of it and I appreciate you being here, Secretary Vilsack, to talk about that. In terms of the labor standards, they’re not only better and enforceable, but we have things in this agreement that we’ve never had in any agreement, as Mr. Wessel knows. So some of my Democrat colleagues who have talked for years about some of these issues, including talking to me when I was USTR, it surprises me that they aren’t finally saying that they can accept victory, because this is what they’ve been asking for.

“Here’s some examples. We’ll start with the number of jobs created. This is the ITC study that is an independent entity as you know and they do their analysis. 176,000 new jobs. Enforceable labor standards, are they in NAFTA? No. Are they in USMCA? Yes. Same with environmental standards. Rules for the internet economy we talked about. Yes [to USMCA]. No [to NAFTA]. 70 percent of steel of vehicles made, including in Mexico, have to be made with steel from North America. That’s a big deal and that’s something I don’t think has been talked about at all today. That’s in USMCA, it’s certainly not in NAFTA. 40 to 45 percent of the vehicles must be made by workers earning at least $16 an hour. Now frankly, it’s surprising to me that a Republican administration would negotiate that, but they did and for Democrats now to look at it and say, ‘That’s not good enough.’ Give me a break. I mean this is exactly what many of my Democratic colleagues have been calling for for years and that’s in this agreement. Is it in NAFTA? No, of course it’s not in NAFTA. So these are just an example of some of the differences and I think if we’re objective about it, as you all have been today, and point out what the differences are, I think it’s a pretty easy decision for a Republican or Democrat that really cares about these standards.

“Now Mr. Wessel, you’ve talked today about how you’d like to see more certainty on the enforcement side and I get that. By the way, you’re on the Goodyear Board in Ohio, a good Ohio company and I appreciate all the work you’ve done over the years for the steelworkers and others. And we’ve made some progress but you’re looking for a way to ensure that we can have better standards. So I would just say, of course we want them to fully and effectively implement these agreements. I would also say that if we want Mexico to do all that, if we want them to expedite the hiring of thousands of judges and labor rights professionals, appropriate the funds necessary to implement reforms, take labor justice seriously, we need to make good on our end of the bargain, otherwise none of that happens. I don’t think. In other words, Mexico adopted these reforms, legally, they changed their laws and statutes because of this agreement and because of our willingness to make good on our promise and support USMCA. You make a good point about Mexico’s four-year transition period for its labor reforms. I too, want them to fully implement the law because, like you, I know it’s going to help create that level playing field for our workers, but we also have to consider what governs the rules of U.S.-Mexico trade during that period and that leads me to my question.

“During the four-year transition period for Mexico’s labor reforms, is it better for American workers to compete under NAFTA’s rules that lack labor enforcement or under USMCA rules which upgrade NAFTA to make labor efficient enforceable and make the rules of origin stronger?”

Mr. Michael Wessel, President of The Wessel Group and staff chair for the Labor Advisory Committee for Trade Negotiations and Trade Policy: “Thank you for your question and thank you also for your work, Leveling the Playing Field Act and other issues where labor has worked with you and your office so I appreciate it. Let me respond, if I can, not only to that question but to the chart as well because we are still working to improve some of those standards. As it relates to the 70 percent of the product, the steel and aluminum, it still would allow for Chinese carbon steel to be imported into Mexico, for example, transformed into body panels and qualify as originating. Similar for aluminum. We are seeking to fix that and have been engaged in discussions with the administration on that. Your last point about earning at least $16 an hour, it’s actually an average provision, so you could have three people making $28, which is often the base salary, and then you have a number who could make $12 and it would all be averaged in. So behind each one of the provisions you’ve outlined in there, there’s still a lot of work that needs to be done and we’re working on that.

“We’re looking at trying to have a high value target approach working with the administration to make sure that in certain traded sectors, let’s take autos and auto parts, which contribute so much to the bilateral deficit where we’ve seen so much job loss, that action in those workplaces be a priority first. Understanding that it is going to take Mexico quite some time to be able to implement all of its commitments, we think there could be a phased, front-loaded approach to make sure that we get the high-valued targets that matter to U.S. workers the most first and implement over time all the remaining provisions.”

Portman: “Well, Mr. Wessel I hope that you will be able to work through some of those issues and get the clarification you need, but also not make the perfect the enemy of the good. This is a vast improvement for you and your interests and it would just be, to me, a crime if we were to end up not being able to get this agreement done and then go into next year, an election year, with all of the uncertainty that that would entail. Again, all of us would have slight differences in how we approached this, no question about it, but this agreement is a big improvement over the status quo and I hope we can all agree on that.”

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