WASHINGTON, DC – Today, U.S. Senator Rob Portman (R-OH) delivered remarks on the Senate floor highlighting the economic benefits of the U.S.-Mexico-Canada (USMCA) Trade Agreement, which will strengthen our economy and support American workers, farmers, and manufacturers. Portman supports the USMCA because it will create new jobs, expand opportunities for agricultural trade, encourage new opportunities for auto jobs in America, and add a new section on digital trade to make online sales easier. Portman has actively called for Speaker Pelosi and House Democrats to bring USMCA to a vote in the U.S. House of Representatives and he released a statement earlier this week after a deal was reached to bring USMCA to a vote in the House.
“[USMCA] is a good agreement, good for jobs, good for small business…good for farmers, good for workers, good for our economy. It’s important we get it done,” said Portman. “I’m glad that the House is going to go ahead and vote on it here in the next week. I wish we could vote here in the Senate right away, too, but under the process called Trade Promotion Authority, we do have some process we need to go through so probably best to have it happen after the holidays. But right after the holidays my hope is that here on the floor of the United States Senate that members look at this for what it is. This is not a Democrat or a Republican victory. This is an American victory. And again I appreciate the efforts of President Donald Trump because he was persistent and tough in the negotiation and then he was persistent and patient in working with the U.S. Congress…And as a result, we now have the ability on a bipartisan basis to get this done.”
A transcript of his remarks is below and a video can be found here:
“I have come to the Senate floor several times over the past year to talk about the importance of passing the U.S.-Mexico-Canada agreement. This is the successor agreement to the 25-year-old NAFTA accord. And, yes, it’s been a year. In fact, it’s been over a year since that agreement was negotiated between Canada and Mexico. And then Congress was meant to take it up. It’s been too long. However, I’m happy to report today that we’re at the end of that long process now, and the legislation is actually going to be voted on, I’m told, in the House of Representatives probably next week and then here in the United States Senate right after the holidays. We’ll have a chance finally to pass this agreement that is so good for the farmers, for the workers, the manufacturers, and small businesses that I represent.
“I’m really pleased that the President of the United States and his chief trade negotiator Bob Lighthizer had the patience and fortitude and the persistence to get this done. I’m not sure I would have had the same patience. And I want to also congratulate House Speaker Nancy Pelosi for making the decision to move forward with it. This is one of these situations where under our law the agreement has to be voted on first by the House. And so the Speaker of the House had an unusual role here where it couldn’t go forward without her approval. And again, finally we’re there. The agreement which was negotiated over a year ago and specific language was sent up here in May of last year is pretty much the same. About 99 percent of it is the same agreement.
“It’s a good agreement because it opens up more markets for us. What has changed is there are new provisions, different provisions as it relates to enforcing the labor standards that are already in the agreement. So in the agreement, what Mexico and Canada were asked to do, in addition to the United States, in terms of higher labor standards, was negotiated over a year ago, but what has happened really over the past several months here is now there is a mechanism to enforce it that is a little different. And I think we will make it easier to enforce potential violations of the agreement we’ve reached, particularly with regard to Mexico. It doesn’t really come back against the United States at all, and we can explain this in more detail as we see the exact language that is coming up in the next couple of days, but bottom line is, for a U.S. company, the labor standards that are established are the ones we already have in our law, and for Mexico or Canada to file an objection to us potentially not following that agreement is simply after there has been a U.S. law process which would involve the National Labor Relations Board and our existing law. So it really shouldn’t affect us at all.
“By the way, Secretary Scalia, who is the Secretary of Labor, was very involved in ensuring it wouldn’t come back on U.S. companies and on U.S. workers and on our economy. So, I think at the end of the day, although it took way too long to get there, we have ended up with a very good result, an agreement that does expand trade, and that’s the whole idea. We have talked a lot about this on the floor as to why this is so important.
“I will tell you, in my home state of Ohio, we send more than half of our exports to two countries. Canada and Mexico. Canada, by far, is our number one trading partner, Mexico is number two. So this is really important because these jobs are really important. It’s about $28 billion a year. These are jobs that pay higher wages, better benefits, export jobs. For our farmers, this is really important. For manufacturers and workers, it’s really important because this lets them be able to do what we do best, which is efficiently, productively make things, produce things that then can be sold to other markets. Remember, in America, we’re only about 5 percent of the global population, but we’re about 25 percent of the GDP of the world. So, we’re a relatively small country by population, but we have got this big economy, and to access that 95 percent of consumers outside of America to sell our products is absolutely essential to our prosperity here, to our jobs here. And as I mentioned earlier, those export jobs tend to be better jobs, higher paying jobs with better benefits.
“So what does this agreement do? First of all, it creates a bunch of new jobs. This chart has 176,000-plus new jobs. That’s because the International Trade Commission, which is the independent body that analyzes these things, gave us a range, but the GDP increase, the increase in our economy and the number of jobs is huge. By the way, greater than any other trade agreement we’ve entered into. Greater, by the way, on the economic growth side than the Trans-Pacific Partnership that many of my colleagues, particularly on the other side of the aisle, thought was something we should have entered into and was so important. This is even bigger. Obviously, it’s so big because Canada and Mexico are such big trading partners with us, so even relatively small changes to open up new markets has a big impact. These are going to be welcome jobs, and again, higher paying jobs.
“Second is it really helps with regard to online sales. One of our advantages as a country is we do a lot of commerce over the internet, and when the original NAFTA agreement was written and what’s currently enforced, the status quo, there really were not any significant online sales, virtually none, so there is no provision in there. Every modern trade agreement has provisions for online sales, for sales over the internet. Now we have them with regard to Mexico and Canada, which we would not have had under the old NAFTA. So that’s a big improvement. For Ohio, that’s a lot of small companies because entrepreneurs, some of these new start-ups are online companies. They would really like this provision. And by the way, it says a number of things. It says you can’t require localization of data. In other words, Canada and Mexico can’t say, ‘Hey, you’ve got to have your servers in our country if you’re going to do business with us.’ That’s really important to our American online industry. Second, it says you can’t put tariffs on data online. Again, very important to establish that. And not just for Canada and Mexico, but as a precedent for other trade agreements going forward.
“Third, it actually raises the de minimis level. In other words, to apply customs duties on stuff going to Canada and Mexico, they have a very low level. We have a relatively high level here. That level is increased for Canada and Mexico. That’s an administrative burden that’s lifted off a lot of these small businesses but also a cost saver. They don’t have to pay customs duty on a relatively small amount of product that goes into this other country. So these are all good things for American jobs. Again, we have a comparative advantage here because we do a lot of online sales.
“The third thing here, it says more U.S. made steel and auto. This is really important to Ohio but also to our country. Manufacturing is finally now on the upswing. Manufacturing jobs are actually increasing in this country for the first time in years, and we’re getting back on our feet in terms of what has always made America great, which is that we produce things, we make things. And so this agreement helps. It says, as an example, that 70 percent of the steel that goes into the automobiles — and the automobile industry is a big deal for Canada and Mexico and the United States — but 70 percent has to be from North America. That helps U.S. steel mills and steel mills in Ohio as opposed to steel coming in from China, as an example, from Brazil and other countries.
“Second, it changes the rules of origin. How much stuff can go into an automobile that comes from other countries. It’s 62 and a half percent now. We take it up to 75 percent in this agreement. That’s the highest level of any agreement that we have with anybody. Why is that important? Well think about it. So we have agreed with Canada and Mexico that we’re going to have this agreement that lowers the tariffs in all these countries, lowers the trade barriers generally. In other words, gives them an advantage in our market. We get an advantage in their market. That’s the idea here. If you don’t have a rule of origin where you say stuff can’t come in from other countries and take advantage of that, then you have basically free riders. So China, as an example, can send a bunch of their auto parts to Mexico and produce a car that is a Mexican car that therefore gets the benefit of the NAFTA agreement. China has not opened its market at all. It’s only provided this product to Mexico but then the product gets the advantage of the lower tariffs and lower trade barriers generally. That’s not fair. So raising it from 62 and a half percent to 75 percent is really significant. And again, it’s the highest number of any trade agreement we have. And it avoids this problem.
“Some have said, ‘Gee, that sounds protectionist.’ I don’t think it is. I think what it says to China or Japan or Brazil or other countries, if you want to get the advantage of the U.S. market that Canada and Mexico are getting and that we get reciprocally with them, then enter into a trade agreement with us. You know, let’s have more trade agreements. Let’s lower the barriers for everybody. So, that actually will expand trade but we ought not allow them to do it without that. So this is a big deal.
“It also is true that in this agreement there’s something unprecedented with regard to leveling the playing field. Now remember, a basic concept of our trade laws is you want to have a balanced trade law where you have imports and exports because that makes sense, keeps consumer prices down. Allows us to have good jobs here. But you want it to be reciprocal and balanced. So you don’t want to have a situation where a country, because of their low wage rates and lack of labor standards or lack of environmental standards or they’re polluting a lot, can take advantage by having lower-cost goods coming into America.
“So in this agreement we do say that there is a minimum wage for between 40 percent to 45 percent of the auto production. It’s $16 an hour. That will end up benefiting us because the wages are relatively higher in America and in Canada than they are in Mexico. So that will be good for auto jobs here and help to level the playing field. This is why you might have seen some of the labor unions are supporting the agreement and some of the U.S. manufacturers are supporting this agreement. They have a lot of facilities here in America. They like that part of it as well.
“New markets for farmers. I mean, this is kind of a no-brainer that has made it, for me, frustrating over the last year because we haven’t been able to move forward on this agreement while farmers have really been suffering, because of a few different things. One is weather. We’ve had some lousy weather, particularly in my state and across the U.S., where it’s too wet to plant and too dry to have the crops grow properly for harvest and that has hit us hard. We couldn’t plant in Ohio in a number of cases in this last year because of the weather being too wet and farmers have been hit by that. Second is prices have been relatively low, not just recently but really over the last several years, particularly for commodities like corn, soybeans, wheat. Part of that is because of the global markets. Part of it is because of the third issue, which is China. Because of our ongoing negotiations with China and disputes with China over what they’re doing on intellectual property, stealing our technology, other issues, they have bought less of our farm products.
“So for Ohio as an example, our number one market overseas for soybeans is China. And one out of every three acres planted in Ohio is planted for export. So think about how that affects your prices if you lose that big market share, that big customer. I’m pleased to say that we seem to be making some progress with China right now, incidentally, as an aside. It’s great to have this agreement done. The next agreement I hope we get done is with China and get them to play by the rules and be able to open up those markets more. This week they started to buy more soybeans. That’s good. But, in the meantime our farmers are desperate for more markets. And in this agreement, that’s exactly what they get. So if you’re an Ohio farmer, we’re number two in the country on eggs, you can now have access to these markets, Canada and Mexico, on eggs that you never had before.
“On dairy, Canada in particular had some very protectionist provisions in place with regard to dairy products, think milk and cheese. Now if you’re an Ohio dairy farmer you can sell stuff into Canada that you couldn’t sell before, but also pork, beef, wheat, other products. So this is good for our farmers. This is why over 1,000 farm groups around the country have supported this agreement. I mean, I don’t know a farm group in Ohio that doesn’t support it strongly and again part of it is this is a great agreement for them, part of it is they’re hurting. This gives them some light at the end of the tunnel, some opportunity to see new markets and therefore see some prices increase in our ag community.
“So this is a good agreement, good for jobs, good for small business, we talked about, good for farmers, we just finished on, good for workers, good for our economy. It’s important we get it done. I’m glad that the House is going to go ahead and vote on it here in the next week. I wish we could vote here in the Senate right away, too, but under the process called Trade Promotion Authority, we do have some process we need to go through so probably best to have it happen after the holidays. But right after the holidays my hope is that here on the floor of the United States Senate that members look at this for what it is. This is not a Democrat or a Republican victory. This is an American victory. And again I appreciate the efforts of President Donald Trump because he was persistent and tough in the negotiation and then he was persistent and patient in working with the U.S. Congress. Because there were a lot of people saying, ‘Go ahead and send the agreement up and try to jam the Democrats into doing the right thing.’ He didn’t do that. He waited to figure out a way to come up with an agreement, particularly on the labor enforcement provisions we talked about. And as a result, we now have the ability on a bipartisan basis to get this done.
“I hope the vote in the House will reflect that. Likewise here in the Senate. I know there are some of my colleagues on both sides of the aisle who think this agreement is not perfect. No agreement is perfect. I will just say that. I’m a former U.S. Trade Representative. I’m a former trade lawyer. I’m a former member of the Ways and Means Committee which is the trade committee over there. I’m now on the trade committee here, the Finance Committee. No agreement is ever perfect. It’s not the agreement exactly that you would write or I would write but boy, this is a good agreement. To make the perfect the enemy of the good, is going to hurt the farmers and the workers and the small businesses who we represent who want this agreement badly because they know it’s going to help them.
“And the other thing I would say is that it also helps our relationships with our two biggest trading partners from Ohio, Canada and Mexico. But also our neighbors. And so for the North American future, this is a good idea to have the certainty and predictability that comes with an agreement we all have been able to coalesce around and be able to approve the status quo. NAFTA was negotiated 25 years ago. A lot has happened in the last 25 years. We talked about how the digital economy has transformed our economy here and we have a competitive and comparative advantage in that. That’s one small example. But so many things have changed.
“We have better protections for intellectual property in this agreement, as an example. We have these new trade opening opportunities in agriculture. We have these opportunities in manufacturing to do more here in North America, and specifically in the United States. So a vote against this new agreement is a vote for NAFTA which is this 25-year-old agreement that has these flaws, because that’s the status quo. So my hope is that the next time I come to this floor to talk about this, it will be to be asking my colleagues in short order to support a vote that will come out of the Finance Committee with a strong bipartisan vote, that it will have come to the floor with a strong vote from the House, and that we can get this done. And that then President Trump can sign it and that the people we represent will be better off, our community of nations here in North America will be better off, and the United States of America will have another victory.”
