The U.S. International Trade Commission released its economic impact report assessing the likely impact of the United States-Mexico-Canada Agreement. The report, United States-Mexico-Canada Agreement: Likely Impact on the U.S. Economy and Specific Industry Sectors, provides an assessment of the likely impact of the agreement on the U.S. economy as a whole and on specific industry sectors and the interests of U.S. consumers.
However, this report does not grasp the full economic impact since it is not a new trade agreement — USMCA is an update to the North American Free Trade Agreement. Because NAFTA has already eliminated duties on most qualifying goods and significantly reduced nontariff measures, USMCA’s emphasis is on reducing remaining nontariff measures on trade and the U.S. economy. Instead the report addresses other issues that affect trade, such as workers’ rights; harmonizing regulations from country to country; and deterring certain potential future trade and investment barriers.
The Commission’s model estimates that USMCA would raise U.S. real GDP by $68.2 billion (0.35 percent) and U.S. employment by 176,000 jobs (0.12 percent). The model estimates that USMCA would likely have a positive impact on U.S. trade, both with USMCA partners and with the rest of the world. U.S. exports to Canada and Mexico would increase by $19.1 billion (5.9 percent) and $14.2 billion (6.7 percent), respectively. U.S. imports from Canada and Mexico would increase by $19.1 billion (4.8 percent) and $12.4 billion (3.8 percent), respectively. The model estimates that the agreement would likely have a positive impact on all broad industry sectors within the U.S. economy.
Many agriculture groups emphasizes the overall win that USMCA would be for American agriculture and urges Congress to quickly pass the updated agreement.
National Corn Growers Association President Lynn Chrisp said, “The release of the ITC report is an important step in moving USMCA toward Congressional action. ITC reports typically measure the economic impact of new trade agreements and focus on market access. USMCA is different – it’s an update to the North American Free Trade Agreement – which already eliminated most tariffs on exports of U.S. food and agriculture products. So, the ITC report released today doesn’t fully capture the economic benefits of trade with Canada and Mexico, nor the improvements to trade rules in USMCA that benefit agriculture.”
“National Pork Producer Council supports ratification of USMCA, an agreement that preserves zero-tariff access to markets that represent more than 30 percent of total U.S. pork exports,” said Nick Giordano, NPPC vice president and counsel, global government affairs. “We are eager to see the removal of U.S. metal tariffs that prompted Mexico’s 20 percent retaliatory tariffs nearly a year ago. Members of Congress have said that ratification of USMCA will be delayed and the benefits of the agreement diluted as long as this trade dispute goes unresolved.”
Giordano added, “The value of U.S. pork exports to Mexico are down 32 percent this year due to punitive tariffs. Our farmers need zero-tariff trade restored to our largest export market.”