USMCA Passage and the Future of Manufacturing in the United States

Published on: July 19, 2019

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In November 2018, there was a modification of the 25-year-old North American Free Trade Agreement, which resulted in the United States-Mexico-Canada Agreement. The trade agreement was applauded by manufacturers across the United States. However, despite the high expectations among manufacturers in the United States, the agreement is yet to be ratified by the United States Congress. At the forefront of the expected positive impact of USMCA is the National Association of Manufacturers who are of the opinion that the USMCA will bring about restore certainty, improvement of rule of law and building of partnerships within trade partners in the region.

While each of the three countries is expected to benefit from the agreement, as for the United States, creating of jobs and major economic growth seems to be the talking points of the USMCA advocates. Expected to benefit the most from USMCA agreement is the manufacturing sector of the United States. The US manufacturing industry’s most significant partners are Canada and Mexico. Small and Medium Sized manufacturers will no longer have to battle with the bureaucracy and bottlenecks experienced in order to sell their goods in Mexico and Canada. Same with the sourcing of rare raw materials available in larger amount in both countries. One of the strengths of the agreement is the protection of intellectual rights, creating new standings and building on existing ones. The potential benefits are not limited to just a certain segment of the United States but all states, counties and communities.

There is a lot online with the failure of Congress to ratify the USMCA; 12 million manufacturing jobs across the United States are being jeopardized, more employment opportunities are likely to be opened up through the impact of the agreement. We are also quick to forget that the combination of Canada and Mexica are responsible for the purchasing of 20% of the United States manufacturing output. This is around 2 million manufacturing jobs being put at stake due to the failure of Congress to affirm the dictates of the USMCA. It doesn’t end there, not less than 43,000 small and medium sized businesses will feel the fall out of this agreement.

While the United States industries patiently awaits the ratification of the USMCA, it is important to state that the agreement is more like an update in line with currently technology and trends. This is why it focuses more on services, patents and intellectual property among the industries. The concern with observers is that USMCA is likely to determine how negotiations and trading will work between China, and the trio of United States, Mexico and Canada. Conclusively, it is important to state that the Automobile and Dairy industry stands to benefits a lot from the USMCA than any other manufacturing sub sectors in the United States. While USMCA is far from revolutionary, it is setting new standards and breaking new grounds.

 

NAM News Room. “USMCA Passage Is Critical for Manufacturers in Every State.” NAM, 10 July 2019, www.nam.org/usmca-passage-is-critical-for-manufacturers-in-every-state-4675/.
“What Would The USMCA Mean For Manufacturing In The U.S. States?” The Metals Service Center Institute, 15 Apr. 2019, www.msci.org/what-would-the-usmca-mean-for-manufacturing-in-the-u-s-states/.

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