Every Sector Gets Boon from USMCA
Aug 16, 2019
Agriculture and food processing in America feeds and fuels the world – and particularly North America. Over half of America’s agriculture exports are consumed by Canada and Mexico – everything from pork to powdered milk. But policies, like Canada’s discriminatory dairy supply management, have kept U.S. farmers at a disadvantage. The USMCA reduces or eliminates these types of barriers, significantly expanding market access for American farmers. USMCA also contains provisions to help ensure our farmers avoid future barriers. The agreement ensures that food safety measures are based on science, and disallows the misuse of geographic indicators that would prevent U.S. producers from using common names.
Canadian barriers to American milk and cheese
Quota and limits on Canadian imports of U.S.eggs
Canadian tariffs on poultry
Allowed discriminatory grading of U.S. wheat
No provisions on agricultural biotechnology
The International Trade Commission projects that USMCA will increase U.S. agricultural exports by $2.2 billion. Find more information on the benefits of the USMCA from the U.S. Department of Agriculture.
Digital Products and Services were largely nonexistent in 1994 when NAFTA was ratified. Trading software, streaming songs and selling goods online are now staples of a modern life, but until USMCA there hasn’t been a uniform agreement on how to handle those exchanges across borders. The new agreement’s digital trade chapter will prohibit duties on products distributed electronically—like movies, video games and songs) and limit costly data localization mandates.
A report from the Internet Association found that digital trade supports more than 1.4 million U.S. jobs and that those jobs are spread across industries like agriculture, manufacturing and retails—not just technology.
“Digital trade is how small mom-and-pop shops across America are able to become global exporters with the click of a button.”—Internet Association Chief Economist Christopher Hooton
“…[USMCA] supports America’s innovation by reducing barriers to digital trade, preventing discrimination of America’s online payment platforms and eliminating technical barriers to trade.” —President and CEO of the Consumer Technology Association Gary Shapiro
Manufacturing in America supports more than 12 million jobs. More than 2 million of those jobs and more than 43,000 businesses across the country depend on exports to Canada and Mexico.
The U.S. auto manufacturing industry will particularly benefit from USMCA’s innovative provisions. The agreement levels the playing field for American workers by providing greater incentives to source goods and materials in the United States and North America. According to the U.S. Trade Representative, USMCA will also add 76,000 new automotive jobs and $34 billion in investments over five years.
“USMCA’s requirements are estimated to increase U.S. production of automotive parts and employment in the sector…” –U.S. International Trade Commission report
Small Business in America accounted for nearly half of private sector employment in 2016. USMCA is the first trade agreement with a chapter dedicated to small and medium-sized businesses.
The U.S. Chamber of Commerce says that 98% of American exporters are small or medium-sized businesses. Canada and Mexico are the top two export destinations for U.S. small business. According to the United States Trade Representative, they sent $51 billion in goods to Canada and $76 billion in goods to Mexico in 2016.
For small businesses, the USMCA will:
- Cut red tape and simplify the customs process
- Eliminate old requirements that businesses open a foreign office
- Establish a new committee to expand opportunities for small business to sell goods internationally
- Facilitate e-commerce and the shipment of small, lower-value consumer goods
Energy exports and imports with Canada alone represented $92 billion in trade in 2017. Canada and Mexico took in more than half of all U.S. energy exports in 2018. Mexico is also now the biggest export market for American LNG and in the top five export markets for American-made oil and gas equipment.
The USMCA will protect the zero-tariff treatment of energy products in North America, while enhancing stability and predictability for further investment and development.
According to industry groups, the efficient energy trade cemented by the USMCA will:
- Continue supporting more than 10 million U.S. jobs;
- Make energy more affordable for consumers;
- Bring North America closer to energy self-sufficiency.
Renewable fuels will also benefit from USMCA, which will also maintain zero-tariffs on grain products like ethanol.
Intellectual Property protections are key to supporting American innovation, which is a fundamental driver across the U.S. economy. The USMCA includes new rules that promote U.S. exports of IP-intensive products and services to Canada and Mexico, by:
- Providing for 10 years of data protection for biologic medicines, bringing Canada and Mexico into closer alignment with U.S. law;
- Requiring 10 years of data protection for agricultural chemicals (instead of the 5 years provided for in NAFTA);
- Requiring strong protections for trade secrets, including against misappropriation by state-owned enterprises;
- Requiring criminal penalties for camcording protected work like movies;
- Requiring a minimum of 15 years of protection for industrial design (instead of the 10 years provided for in NAFTA).