In advance of the Senate beginning the impeachment trial of President Trump, the upper chamber ratified the USMCA trade agreement with an 89-10 vote. The agreement now moves to the White House where President Trump will sign it.
The final ratification is the result of two-years worth of renegotiated trade reform, and the outcome gained bipartisan support in both the House and Senate. The only republican senator who voted against the deal was Pat Toomey of Pennsylvania who is concerned the USMCA will weaken the position of Wall Street multinationals.
Nine democrat senators did not support the agreement because there wasn’t enough verbiage to support their climate change priorities, and the USMCA does not align with the Paris Climate Accord. [Vote Tally Here]
USMCA gives American producers better access to Canadian dairy markets, and creates a cornerstone for a revitalized U.S. manufacturing base. The deal has much more strict rules of origination for the auto-sector with 75% of parts and materials must be made in north America. Combined with the requirement that 40% of those industrial parts must come from plants where workers make a minimum of $16/hr, the U.S. auto-industry will gain significant benefits.
USMCA closes the loophole where imported manufactured goods were delivered into Mexico and Canada, assembled, and then shipped into the U.S. market. The agreement requires the creation of the goods in North America in order to avoid tariffs.
Other major changes include modernized rules for digital trade and enhanced copyright protections for intellectual property. The economic gains from the agreement will be felt over many years as manufacturers now have a concrete way to estimate the total cost of production in North America as compared to Asia. The initial estimates highlight GDP gains around .35% with an additional 176,000 jobs for American manufacturing workers.
Mexico has already ratified the agreement and with U.S. ratification the deal is now only waiting on ratification within Canada before it goes into full effect.