The United States-Mexico-Canada Agreement recently passed in the U.S. House of Representatives by an overwhelming margin of 381-41. Senate action is not likely until after the impeachment trial. Counted among the dissenters were Maine’s U.S. Reps. Jared Golden and Chellie Pingree, both Democrats. The statement released by Rep. Golden’s office explains that Maine’s freshman congressman voted no, because the agreement lacks sufficient country of origin labeling, provides insufficient environmental protections and will not bring back American jobs that were lost from the implementation of NAFTA. Rep. Pingree adds that the agreement ignores the climate crisis and fails to decelerate the rate of climate damage caused from dependence on fossil fuels for energy.
The greater issue is protectionist trade policy. The new USMCA aims to protect U.S. auto industry jobs with the threat of new tariffs. Unfortunately, by imposing barriers to trade, these measures will backfire, dampen economic vitality, raise prices for U.S. consumers, complicate the resolution of disputes and diminish U.S. competitiveness. The USMCA imposes barriers to three-way trade and weakens our North American alliance. In other words, it is overly protectionist.
The North American Free Trade Act was and remains a groundbreaking achievement. In 1994, the three countries of North America agreed to eliminate most tariffs on products, primarily agriculture, textiles and auto manufacturing. The United States and Canada, the two countries with highly developed economies, understood how a trade agreement would help advance the economic and social fabric of Mexico, and thereby strengthen the security and competitiveness of all North Americans. Since adoption of NAFTA regional trade has tripled and U.S. exports to Mexico have grown more than fivefold. The NAFTA accord established new dispute resolution mechanisms and later, labor and environmental safeguards.
Rep. Golden states that Maine lost 30,000 jobs in manufacturing between when NAFTA was signed in 1994 and 2015. His implication that over 20 years the loss of Maine manufacturing jobs is due to the NAFTA agreement is a fuzzy but oft-repeated claim. However, the record shows that since China joined the World Trade Organization in 2001 the decline of U.S. manufacturing jobs is mostly attributable to the relocation of production to China, not Mexico. Nearly as significant as a cause for the number of displaced manufacturing jobs over the last 20 years is the pace and sweep of rapid technological change. Back on our home continent, consider the 14 million U.S. jobs that rely on trade with our two largest trading partners, Canada and Mexico, with nearly 200,000 export-related jobs created annually.