Billy Long: Modernizing NAFTA into a 21st Century agreement

(From Seventh District Congressman Billy Long)

It’s been nearly 25 years since the North American Free Trade Agreement (NAFTA) was signed by the U.S., Canada and Mexico. This landmark free trade agreement was created for the purpose of making it easier for companies in each country to do business. Because of this agreement, nearly all tariffs were eliminated, with the exception of a few agricultural products.

In the last 25 years, NAFTA has become outdated and has failed to keep up with today’s ever-changing economy, leading to our annual goods trade deficit growing to almost a trillion dollars since 1993. President Trump campaigned on a promise of renegotiating this agreement in order to benefit all Americans and to reflect a 21st century global economy.

On September 30 of this year, after months of negotiations, President Trump, along with Mexico and Canada, reached an agreement to update and revise NAFTA, renaming it the U.S.-Mexico-Canada Agreement (USMCA). USMCA is a free and fair-trade deal that will support high-paying jobs in the U.S. while also growing the North American economy.

USMCA would incentivize industries, such as manufacturing, to obtain their products in North America by updating the rules of origin and origin procedures. Not only would USMCA require that 75 percent of auto content be made in North America, it would also require that individuals who make 40 – 45 percent of auto content make at least $16 an hour, helping increase wages.

Similar to manufacturing, the agriculture industry would also significantly improve under USMCA. Specifically, USMCA would provide new export opportunities for dairy products between the U.S. and Canada, eliminate some agriculture tariffs previously put in place under NAFTA, such as whey and margarine, and allow the U.S. access to new markets in Canada.

While NAFTA was created to tackle problems that would arise in the 21st century, it has failed to keep up with changing technology and the economy. USMCA aims to fix these problems by updating and modernizing intellectual property protections, which would strengthen innovation and economic growth. Some of those provisions include expanding patent protections, a 10-year data protection on biologic drugs, establishing standards that prevent individuals from obtaining or reproducing digital content illegally as well as increasing protections for trademarks.

Along with enhanced intellectual property provisions, USMCA addresses modern forms of commerce by creating a new Digital Trade chapter. Digital trade is a key driver of U.S. economic strength and accounts for more than half of U.S. services exports. This new chapter will help support the growth of e-commerce and consumer demands, while also setting a standard for other countries around the world.

This is just another example of President Trump following through on a promise that betters American lives. The president is expected to sign USMCA on November 30, 2018, before sending the agreement and implementing legislation to Congress for approval. It must also be approved by the governments of Canada and Mexico.