The new U.S.-Mexico-Canada Agreement (USMCA) is expected to benefit the country’s economy and expand opportunities for California businesses.
While commerce and manufacturing have changed in the last quarter century, provisions guiding trade have not kept pace. California business experts, including the California Chamber of Commerce, encouraged an update to the North American Free Trade Agreement (NAFTA), which was implemented more than 26 years ago. Enter the USMCA.
Passed in bi-partisan fashion by both the U.S. House of Representatives and the Senate, USMCA was signed by President Trump in January. Mexico had ratified the agreement, while the ratification process is underway in Canada.
Mexico is California’s top export market and Canada, the second largest. According to the CalChamber, Mexico purchases 17 percent of the state’s exports, and Canada purchases 9.9 percent. Together in 2018, those countries provided more than $48 billion in trade for California businesses.
“Three out of four California manufacturers export to Canada and Mexico,” noted Gino DiCaro, senior vice president of the California Manufacturers & Technology Association.
CalChamber shared that the new agreement could foster expansion of international trade and investment. Additionally, the USMCA could expand fair and equitable market access for California products abroad as well as eliminate disincentives impeding international competitiveness of California business.
According to information from the office of U.S. Ambassador Robert Lighthizer, U.S. trade representative, the new agreement can create a more level playing field for workers in the California’s automobile industry and benefit the state’s vast agriculture sector.
California Manufacturers & Technology Association also affirmed the support USMCA offers California manufacturing.
“Our state’s manufacturers and their workers welcome the opportunities that will come from the administration’s efforts to modernize this USMCA agreement,” said DiCaro. “This deal opens markets, raises standards, provides enforcement and modernizes trade rules so that manufacturers can grow the economy.”
Lighthizer’s office offered that USMCA also addresses burgeoning digital commerce, something that barely existed when NAFTA was passed. Additionally, the new agreement supports the 21st century economy with more protection for U.S. intellectual property.