While the U.S. economy continues to show steady signs of growth, considerable concern in the business community is growing about U.S. trade policies. And rightly so – with 95% of the world’s consumers located outside of the U.S., it is critical we have policies in place to promote international trade.
Fortunately, our leaders in Congress have the opportunity to bolster exports and drive economic growth by approving the new US-Mexico-Canada Agreement, signed earlier this year. Approval is of particular consequence here in New England, where two of our region’s top trade partners are our neighbors to the north and south.
The USMCA makes critical updates to modernize the previous trade pact between our three nations, the North American Free Trade Agreement. NAFTA, which has been in place since 1994, was written before many of the digital technologies driving our 21st century global economy existed, such as cloud computing and online commerce. The USMCA addresses such important topics as cross-border data flow and data localization, and takes key steps to protect U.S. intellectual property.
Canada is a top-three trade partner for all six New England states, and Mexico is in the top 10 for five of the six states. Exports from the six New England state to Canada and Mexico totaled nearly $13 billion in 2018 alone. That includes nearly $5.5 billion in Massachusetts. Top exports from the Bay State include computers and electronics, electrical equipment and appliances, and chemicals. At the same time, trade with our North American neighbors supported more than 300,000 jobs in Massachusetts in 2017.
Congress has expressed reservations about the USMCA, particularly on such issues as labor and environmental protections, patent exclusivity for certain medicines, and enforcement mechanisms. While the business community appreciates these concerns, walking away from the USMCA because of them would be disastrous.
Fortunately, House Speaker Nancy Pelosi has taken the initiative to establish a working group to negotiate with Ambassador Robert Lighthizer, the U.S. trade representative, to address these concerns. Several New Englanders – including House Ways & Means Committee Chairman Richard Neal of Massachusetts – have been named to this nine-member group, so our region’s interests are certainly well represented, and we are confident the group will reach a satisfactory resolution.
In our 21st century global economy, access to foreign markets is vital to the success of American businesses. It is imperative the U.S. continue to maintain and expand trade relationships with key partners around the globe, and in particular, with our immediate neighbors here in North America. The New England Council is hopeful Congress will consider the impact trade with Canada and Mexico on our nation’s economic well-being and will take swift action to approve this important trade deal.
James T. Brett is the president and CEO of The New England Council, which is dedicated to promoting economic growth.