USMCA assessment indicates “moderate” impact on U.S. economy
A key deadline in securing congressional approval of the U.S. – Mexico – Canada Agreement (USMCA) was met in late April when the U.S. International Trade Commission issued its required assessment of the likely impact of the USMCA on the U.S. economy. The report indicates that the impact of the agreement on the U.S. economy is “likely to be moderate,” with a U.S. real GDP impact of 0.35 percent, an employment impact of 0.12 percent and an average increase of 0.27 percent in wages of U.S. workers. The USMCA also is expected to increase U.S. trade with Canada and Mexico by approximately 5 percent.
Senate aides say the U.S. must approve the USMCA before late August when the 2020 presidential campaign heats up because lawmakers running for president in 2020 won’t want to deal with the trade issue.
Mexico has adopted the labor reforms required by Democrats in the U.S. House of Representatives before permitting a vote on the Agreement. These include allowing workers to have secret ballots in union elections and collective bargaining agreements.
The National Association of Manufacturers (NAM) has produced a USMCA one-page overview that underscores the importance of congressional passage of the agreement. NAFEM members are encouraged to use this document in their advocacy outreach with elected officials and other stakeholders. NAM also has launched an online app to easily and quickly send emails to elected officials in support of the USMCA
As an aside, if the USMCA is not approved to replace the current North America Free Trade Agreement (NAFTA) and one of the three countries wants to leave the agreement, article 2205 requires written notice six months prior to withdrawing. NAFTA has no expiration date.