On Senate Floor, Portman Highlights USMCA as Victory for the American People

December 19, 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. Portman applauded the bipartisan passage of USMCA in the House of Representatives and called the agreement a win for the American people.

“I’m here on the floor again for the third time in three weeks to talk about the U.S.-Mexico-Canada Agreement, USMCA. Just a few moments ago, this trade agreement passed the House of Representatives by a vote of 385-41. That’s extraordinary,” Portman said. “There are a lot of folks I hear talking who say one side won or one side lost in the negotiations over USMCA. I don’t think that’s it. I think because of the hard work of U.S. Trade Representative Bob Lighthizer and the Trump administration and President Trump himself supporting this and pushing it, I think neither side won, but the American people won. And isn’t that nice to see.”

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

“I’m here on the floor again for the third time in three weeks to talk about the U.S.-Mexico-Canada Agreement, USMCA. Just a few moments ago, this trade agreement passed the House of Representatives by a vote of 385-41. That’s extraordinary. Trade agreements sometimes tend to be pretty controversial, and more recently in our history, pretty partisan. In this case, Republicans and Democrats alike helped negotiate a good agreement, and Republicans and Democrats alike supported it. Let’s now get that agreement over here. Let’s not wait. The people in Ohio and all around this country who are going to benefit from it need those benefits now, so I’m very pleased that the president and his Trade Representative Bob Lighthizer patiently negotiated with Speaker Pelosi and House Democrats and were able to get something done, and now that it’s close to becoming the law of the land, all it needs is a vote over here in the Senate and the president will sign it into law.

“Thanks to important measures designed to strengthen our economy, create more jobs, and increase market access, this new agreement, the USMCA, actually helps level the playing field between the United States and Canada and Mexico. First of all, it’s going to result in more jobs. The independent International Trade Commission has said, over 170,000 new jobs. That’s a mid-range. It could be a lot more than that. But they’ve also said that these are good-paying jobs – jobs in trade tend to pay about 15 percent higher on average, they have better benefits. So this is a bunch of good jobs. By the way, they estimate at least 20,000 jobs in the auto industry will come to the United States that would not have come otherwise. And I come from Ohio, a big auto state. It’s a state that cares a lot about manufacturing and specifically autos, and they’re both going to be helped by this agreement.

“Part of the way it’s going to create jobs here is by leveling the playing field on labor standards and enforcing those standards. Also it has higher content requirements for U.S.-made steel, and for auto parts that go into an automobile. As an example, USMCA requires that 70 percent of the steel going into cars comes from North America. There’s no provision like that in the status quo, in the NAFTA agreement. So this is a big improvement for us to drive more jobs here in America with regard to the steel production that goes into automobiles. But, second, it says that 75 percent of the overall content in USMCA automobiles that are sold through this agreement have to be from North America. That’s a big jump. In the current agreement, instead of 75 percent, NAFTA has 62.5 percent.

“What does that mean? It means that if you make a car, say, in Mexico, and it has a bunch of parts that come from other countries -- say, Japan, or China, or Germany -- they can’t take advantage of the USMCA lower tariffs unless they have at least 75 percent North American content. So, that’s a big difference. Now, there are some, including on my side of the aisle, that have criticized this provision and said that somehow this is a protectionist provision. Let me just make this point -- we are agreeing with Canada and Mexico that we’re going to have a new agreement with them that lowers barriers – tariff and non-tariff barriers – on our borders with Canada and Mexico. We’re taking advantage of that, each other, trading back and forth. That’s why we’ll have more trade, more jobs. If other countries want to take advantage of that by coming into Mexico or Canada and adding parts to the cars, they’re free riders because they’re not giving us the reciprocal access to their markets, as Canada and Mexico are. That’s why I think this agreement makes sense.

“Now, I think it’ll incentivize two things. One, it’ll incentivize more jobs here, auto jobs, manufacturing jobs, steel jobs. But second, it will incentivize those other countries to enter into a trade agreement with us. We’ve talked about this with Japan, we’ve taken the first step in starting to put together what is considered a broader free trade agreement. I hope we get to one – it would be important. But if they can simply free ride on existing agreements, by having their stuff be transshipped from another country into the United States to take advantage of the lower tariffs that we’re providing to Canada and Mexico, they wouldn’t have that incentive to trade with us, with their own agreement.

“So I think this is a good thing for encouraging more trade agreements and more trade openness. The International Trade Commission also tells us that the USMCA is going to grow our economy. In fact, they say it’s going to grow our economy by double the gross domestic product of that that was projected under the Trans-Pacific Partnership. Some may remember that agreement, the TPP, many of my colleagues, particularly on the other side of the aisle, held that agreement up as one that would have been great for America and that we should be part of it. I think it is important that we trade with our neighbors in Latin America and in the Pacific Rim, but frankly that agreement that was touted as being so great had less than half of the economic growth that we’re talking about here. So this is more than double the economic growth we saw in the TPP.

“Second, the USMCA means new rules of the road for online sales. This is really important. So much of our economy today and our commerce takes place online. And yet there’s nothing in NAFTA on it. You think about it – 25 years ago there was no significant online commerce, and so there’s nothing in the agreement. Whereas in this agreement there are a few things that are very important, and for my state of Ohio and really our entire country, a lot of our commerce is done online now. We have a lot of small businesses engaged in it. They want to do business with Mexico and Canada, but they have no protections. No protection from tariffs that can be assessed on that trade. This says no tariffs.

“Also, data localization is something some countries are doing to American online companies. So if you’re an online commerce in America, another country may say, ‘You know what? You can do business in our country only if you localize your data. Meaning the servers have to be in our country, in Mexico or Canada, for example.’ This agreement says ‘No.’ It prohibits that data localization requirement, which allows us, again, to sell more to those countries without having to place our servers there. It also says that the de minimis level on customs duties for sales online is increased. This saves money because people can now be involved in commerce with Canada and Mexico and not pay as much in terms of the customs duties and tariffs. But also just an incredible administrative burden being lifted, not having to worry about that. So this is good for us, because we do a lot of online commerce here.

“And third, I would say that American farmers are strongly behind this agreement for a good reason, which is that it opens up more markets for them, and adds more certainty for them. Again, the NAFTA accord is 25 years old. And we had hoped during the last 25 years we would get at some of the protectionist policies, particularly with regard to Canada and dairy and with regard to wheat, other issues but we didn’t have much success until now. Now with the USMCA we’ve got the ability to send more of our stuff to these countries, and that’s why the ag community is so excited about it. Between bad weather, low prices, a shrinking China market, our farmers have been hit hard, and this is a light at the end of the tunnel. That’s why, by the way, over 1,000 farm groups have come out in support of USMCA.

“There are a lot of folks I hear talking who say one side won or one side lost in the negotiations over USMCA. I don’t think that’s it. I think because of the hard work of U.S. Trade Representative Bob Lighthizer and the Trump administration and President Trump himself supporting this and pushing it, I think neither side won, but the American people won. And isn’t that nice to see? I think that’s why you saw today on the floor of the House of Representatives a vote of 385-41. I think now more people are going to be able to benefit from trade with these two countries.

“For Ohio, Canada is by far our largest trading partner. Mexico is number two. So this is a big deal. More modernized trade that will replace an agreement that’s shown its age with unenforceable labor standards and environmental standards, nonexistent digital economy provisions, outdated rules of origin provisions -- this changes all of that. We’ve waited long enough. It’s time, now that the House has voted this evening -- which was great news -- to get that legislation over here to ensure that we do have a great victory for American farmers, for small businesses, for our manufacturers, for our online businesses, and so many others. I look forward to the opportunity, Mr. President, to be able to vote for it over here.”

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