The Trump administration’s proposed U.S.-Mexico-Canada Agreement on trade would boost the U.S. economy by $68.2 billion and add 176,000 jobs, according to a report released Thursday by the U.S. International Trade Commission, an independent federal agency.
The analysis should aid passage of the deal, which would replace the 1993 North American Free Trade Agreement but is currently stalled in Congress.
The commission nevertheless said that the deal’s impact would be “moderate” in light of the trade agreements already in place with Canada and Mexico. “Because NAFTA has already eliminated duties on most qualifying goods and significantly reduced nontariff measures, USMCA’s emphasis is on reducing remaining nontariff measures on trade and the U.S. economy,” the report said.
The deal would strengthen labor standards and rights, especially those in Mexico, increase intellectual property rights protections enjoyed by U.S. firms, and reduce the scope of the system for settling disputes between investors and individual countries, likely leading to less U.S. investment in Mexico — and freeing up capital for domestic manufacturing and mining, according to the report. The projected positive effect would be small, though.
The Trump administration is trying to booster support the deal’s approval by Congress and get it passed by this summer. It released a report Thursday touting the deal as adding 76,000 jobs to the domestic auto industry.
U.S. Trade Representative Robert Lighthizer said the report’s findings “validate” the administration’s decision to renegotiate NAFTA. “This report is an important step forward in gaining congressional approval of the USMCA … There can be no doubt that the USMCA is a big win for America’s economy,” he said.
House Speaker Nancy Pelosi, D-Calif., has been noncommittal about bringing it up for a vote, however, and many Democrats have argued the administration should reopen talks with Canada and Mexico.
Business groups said the study showed that Congress should embrace the deal. “This agreement will level the playing field for manufacturers in the United States and support the 2 million American manufacturing jobs that depend on our exports to Canada and Mexico,” said Linda Dempsey, vice president of international economic affairs for the National Association of Manufacturers.
Democrats were less enthusiastic. Sen. Ron Wyden, D-Ore., the ranking Democrat on the Senate Finance Committee, said the report confirms that the trade deal was “at best a minor update to NAFTA” that would only provide modest benefits to workers. “As I’ve said for months, the administration shouldn’t squander the opportunity to lock in real, enforceable labor standards in Mexico and fix the enforcement problems that have plagued NAFTA,” he said.
Farmers for Free Trade, an agriculture industry coalition group, said the real problem was allowing the legislation to linger, since that created confusion over what is the current U.S. trade policy. “The true benefit that USMCA delivers for American farmers is certainty and stability,” said Brian Kuehl, the coalition’s co-executive director. “Especially right now, American farmers need a victory. USMCA will guarantee that their most important export markets remain open for business and free from red tape.”
