Linda Dempsey is the vice president of International Economic Affairs for the National Association of Manufacturers (NAM). For more information about NAM, visit www.nam.org.
For manufacturers, the need for open and rules-based global trade is simple: 95 percent of the world’s population lives outside of the United States, and access to markets around the world is critical to businesses’ success. To that end, there is no trade relationship more important for manufacturers in the United States than the relationship with our North American partners, Canada and Mexico.
The small businesses and shop floors that export their products — and our way of life — with the world rely heavily on access to Mexico and Canada, which is why we are calling on Congress to ratify the United States–Mexico–Canada Agreement (USMCA) to create a more prosperous future for manufacturers in America. Canada and Mexico alone purchase more from the United States than our next 11 trading partners combined. Trade overall with those two countries supports 12 million jobs, including more than 2 million manufacturing jobs and more than 40,000 small and medium-sized businesses.
Recently released state fact sheets from the National Association of Manufacturers (NAM) show that manufacturing is central to our North American trade, and industry implications are abundantly clear. One in four Pennsylvania manufacturing firms export to Canada and Mexico, and 80 percent of those are small and medium-sized businesses supporting local economies. Moreover, Canada and Mexico alone purchase two-fifths of Pennsylvania’s total global manufacturing exports. Without a free trade agreement, Pennsylvania’s exports to our North American free trade partners could face more than $1.5 billion in tariffs, raising prices on the state’s exports and reducing the region’s international competitiveness.
More than just good for business, ratifying the USMCA would be good for workers and communities. The more than 42,000 Pennsylvanians who work in manufacturing jobs that rely on trade to Canada and Mexico — from chemicals to construction machinery, iron and steel to food and beverages and more — are waiting on Congress to give them certainty for their futures. These are wellpaying jobs, too. Pennsylvania manufacturing workers make, on average, $72,151 in annual compensation compared to $49,059 for workers across all private nonfarm industries. For the state’s manufacturers and workers,
the necessary path forward is clear: Congress must come together and do what is right by ratifying the USMCA.
In the 25 years since the original North American Free Trade Agreement (NAFTA) came into effect, U.S. manufacturing output has more than doubled, and exports to Canada and Mexico have tripled. And while the U.S. manufacturing industry, and our entire economy, has changed considerably since then, NAFTA hasn’t kept up with the times. The USMCA will improve NAFTA in areas where it hasn’t kept up, strengthening and modernizing rules to rev up America’s innovation engine, expanding access to Canada and Mexico and leveling the playing field for manufacturers in the United States.
Notably, the USMCA includes new best-in-class rules to strengthen protection and enforcement of the full range of intellectual property rights important to manufacturers and their workers in the United States, from patents, trade secrets and trademarks to copyright and regulatory data protection that are critical to all U.S. and Pennsylvania innovative manufacturing industries. It will add a new digital trade chapter that prohibits unnecessary barriers on the movement of information and data, the forced localization of information technology infrastructure or the forced disclosure of source codes that are important to small manufacturers using the Internet as their global storefront and to all manufacturers relying on or creating new technologies. It also contains new chapters on good regulatory practices, technical barriers to trade and sanitary and phytosanitary measures that will set new standards for trade agreements around the world that are vital for food and beverage, capital goods and other manufacturers to prevent discriminatory and unfair practices that limit U.S. access in Canada and Mexico.
Manufacturers know a good deal when they see one, and that’s why we’re calling on Congress to ratify the USMCA, providing fuel for our industry to flourish — and to propel the Pennsylvania economy, and the broader American economy, along with it.