USMCA trade agreement in holding pattern

Posted on Oct 28, 2019 :: Insight on Manufacturing, Web Exclusive
Posted by of Insight Publications

If the United States-Mexico-Canada Agreement isn’t ratified by all three countries, speakers at the Northeast Wisconsin International Trade Conference predicted some dire consequences.

“If we (the U.S.) don’t ratify USMCA, there will be more pressure to withdrawal from NAFTA, which would be a huge mistake,” said U.S. Sen. Ron Johnson, R-Wis. “And if (President) Trump does try leaving NAFTA, I’ll be first in line to file a lawsuit to stop it.”

The Northeast Wisconsin International Trade Conference was held at Fox Valley Technical College’s D.J. Bordini Center. The event used to be held annually, but for various reasons it had not been held in recent years. The day featured not only the USMCA roundtable, but also different breakout sessions to provide educational opportunities about global trade and a keynote address by Oshkosh Corp. President and CEO Wilson Jones.

Leaders of the United States, Canada and Mexico approved the USMCA in 2018 to replace the North American Free Trade Agreement, which was approved in 1993. The agreement will not go into effect until the legislative bodies of each country ratify it. Overall, USMCA is seen as beneficial for workers, farmers and businesses, and many predict it will lead to economic growth in all three countries. The Mexican legislative body has approved it and Canada’s legislature is supportive of it as well but is waiting to act until it passes the U.S. Congress.

“I don’t know why it wasn’t brought up when Republicans had a majority in Congress,” Johnson said. “That was a huge opportunity missed.”

So far, the Democratic-led U.S. House of Representatives has not acted on it.

“If NAFTA is tossed aside and USMCA is not approved, it will be disastrous for all three countries,” said Julián Adem Díaz de León, consul general of Mexico in Milwaukee. “Domestic politics (in the U.S.) shouldn’t get involved with these trade policies. It’s very important it gets approved.”

In Canada, the USMCA will increase confidence in the economy and encourage more businesses to invest in improvements, said Wayne Robson, consul and senior trade commissioner and consulate general in Chicago. “NAFTA was very popular in Canada, and I believe the same will be true for the USMCA,” he said.

Johnson urged attendees to contact their Congressional representatives to ask for action on USMCA.

Ngosong Fonkem, a senior adviser at Addison-Clifton, LLC and an expert on trade, said USMCA is “not the perfect deal, but it’s the best deal we have, and just as NAFTA had changes over the years, there can be changes made with this as time goes along.”

For more on the USMCA and how it may affect Wisconsin manufacturers, check out the November 2019 issue of Insight on Manufacturing.