This week, Congress is expected to vote on the recently updated United States-Mexico-Canada Agreement (USMCA). With nearly 20% of Washington state’s economy tied to international exports, hundreds of thousands of jobs and livelihoods are intrinsically tied to our relationships with our international partners. Strong, enforceable trade agreements have the potential to increase jobs and grow our economy. And after more than 25 years of the North American Free Trade Agreement (NAFTA), an update is long overdue. Following a tumultuous few years, this agreement provides continuity and certainty for Washington farmers and businesses that sold $10 billion in goods and $2.5 billion in services last year to Mexico and Canada.
Here’s what USMCA does to improve upon NAFTA and why it’s a win for Washington.
The USMCA makes three important improvements for Washington agriculture. First, the more than 380 dairy farms in our state will secure immediate benefits with expanded access to Canadian markets. Given Washington’s proximity, it makes sense that our dairy farmers should be able to export more milk, cheese and yogurt to Canada. Second, it protects our produce from being rejected by Mexico unless there is a clear, scientific rationale. This means Mexico can no longer turn away potatoes or apples unless there is scientific evidence of a risk from a pest. Finally, it is a big win for grape growers and winemakers in our state because Washington wines will now compete side by side with Canadian wines and not have to sit in a separate part of the supermarket. Canada is our largest wine market and hopefully about to get larger.
Besides wins for agriculture, the USMCA is good news for the Washington digital economy and the 240,000 people in Washington who work in the digital sector. Digital trade is an important part of our trade relationship with Canada and Mexico. NAFTA didn’t even include the word “internet” because it was enacted years before the internet became what it is today. A key component of USMCA is the robust digital trade chapter that addresses 21st century trade, including prohibiting customs duties on electronically transmitted products and limiting source code disclosure requirements. The USMCA digital trade chapter will set the stage for future international agreements so that the U.S. writes the rules on a free and open internet, not China.
Most important, learning from the lessons of NAFTA, USMCA has the strongest enforcement and monitoring systems ever included in a trade agreement to ensure workers are treated fairly and profits are not prioritized over worker health. A rapid response enforcement mechanism will ensure that facilities manufacturing U.S.-bound goods comply with new collective bargaining and freedom of association laws. If they don’t, they are penalized. After three violations, goods can be stopped at the border. This will make a difference in the lives of millions of workers in Mexico, and will help level the playing field between American workers and companies.
More than a year and a half of negotiations between Congress and the White House made this a significantly better agreement for Americans, including making sure that nothing will stop Congress from lowering drug costs. While we have several big wins in this agreement, we did not get everything we wanted. We wish that our aerospace manufacturers could have secured protections similar to those made for the auto industry. We also appreciate the significant funding for environmental priorities but think there was a missed opportunity to address fossil fuels. We will keep pushing for these in future trade agreements. This stronger USMCA on the whole is an important win for Washington.