When Donald Trump took office and took aim at the North American Free Trade Agreement (NAFTA) as promised on the campaign trail, critics – with good reason – sounded alarm at his in-your-face approach. It’s not, they said, how you deal with neighbors.
Fair enough. But at the end of the day, the United States, Mexico and Canada have hammered out a new and improved trade agreement critical to the economic infrastructure of North America. In fact, the United States-Mexico-Canada Agreement – USMCA, as it’s known – is so important it’s almost unthinkable a Democrat majority in Congress could kill it for no reason other than it was negotiated by the Trump administration.
There is a lot to like about the agreement. It changes “rules of origin” for automobiles manufactured in Mexico and exported to the U.S., raising the requirement for American-made parts from 62.5% to 75%. And it raises the minimum wage Mexican auto workers must be paid. The U.S. International Trade Commission estimates the USMCA would result in $28 billion in new U.S. auto part purchases and create 76,000 U.S. auto jobs.
Something Democrats should like: the U.S. International Trade Commission says the agreement includes some of the strongest – and enforceable – environmental obligations of any U.S. trade agreement. It includes anti-corruption measures, ensures secret-ballot voting for collective bargaining agreements and guarantees the right to strike to enforce labor laws.
NM needs this
How important is the deal for New Mexico? Very.
Journal contributing columnist Jerry Pacheco, executive director of the International Business Accelerator in southern New Mexico, says about 6,000 direct jobs in this state are tied to Mexico trade along with “many jobs where people don’t even know their employment is ultimately tied to trade.”
He said New Mexico exports to Mexico exceed $1.5 billion annually, and Mexico for the first six months of this year supplanted China as our top trading partner – $1.7 billion daily – as the tariff dispute between the U.S. and China kicked in.
Pacheco, who views the deal as key to diversifying New Mexico’s economy over time to reduce our reliance on government and oil and gas, is hopeful Congress will move quickly to approve it. It appears New Mexico’s delegation is supportive, and Mexico’s Senate overwhelmingly approved (184-4) the new agreement in June – at the urging of new President Andrés Manuel López Obrador, who had campaigned on curbing corruption and raising the minimum wage. Canada is expected to do so after Parliament returns from recess.
Meanwhile, Mexico is working hard for ratification in the United States.
So does U.S., Mexico
So now the question becomes whether a Democrat-controlled Congress will deliver a political and economic slap to our neighbors and our hard-working border businesses.
Dr. Luz Maria de la Mora Sanchez, Mexico’s undersecretary for foreign trade, recently visited El Paso/Juarez to make the case for USMCA. De la Mora Sanchez, who has a doctorate from Yale, makes a strong economic argument – 78% of Mexico’s economy is based on foreign trade – but also speaks to the importance of the relationship among North American nations. As reported by Pacheco, she emphasized the U.S. and Mexico are good neighbors and important to each other’s economies.
Mexico’s economic ministry said with Senate approval “Mexico sends a clear message in favor of an open economy and of deepening its economic integration of the region.”
There have been other flashpoints between the U.S. and Mexico, most recently Trump’s threat to close the border if Mexico didn’t stem the overwhelming flow of Central American immigrants traveling through Mexico to seek asylum in the U.S. Mexico responded with troop deployments and other measures.
“There are always issues that friends have, but unilateral actions are a self-inflicted wound on both our countries,” De la Mora Sanchez said, adding she strongly believes the U.S. and Mexico can work together to create effective solutions to solve our problems.
This is what good partners do. This agreement is key to more than economics and jobs. It’s also integral to our future relationships.
The deal is now squarely in front of House Speaker Nancy Pelosi and her leadership team that includes Rep. Ben Ray Luján, D-N.M. Congress can’t really tinker with the trade deal. It would be an up or down vote.
Despite the contentious start and Trump’s early rhetoric and threats to simply cancel NAFTA, the ensuing negotiations have produced an agreement that’s good for American workers, good for the U.S. economy and embraced by Mexico.
Congress needs to do its job. New Mexico’s delegation and Gov. Michelle Lujan Grisham should put their collective shoulder to the wheel and urge their Democratic colleagues to push USMCA over the finish line.
This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.