USMCA trade deal: Leaders, experts praise bipartisan U.S. Senate ratification

Consul General for Mexico in Phoenix speaks to students at ASU West


Business groups and world leaders have praised last week’s passage of an updated North American trade deal by U.S. lawmakers, claiming the measure will bring stability and prosperity.

The Senate ratified the United States-Mexico-Canada trade agreement Jan. 16 on an 89-10 vote. The deal updates the North American Free Trade Agreement, known as NAFTA, which was ratified in 1994 during the George H.W. Bush administration.

The trade pact, better knows as USMCA, provides updates and new provisions to address modern markets and technologies, including new rules for intellectual property, trade secret protections, digital trade, financial services, data storage and currency policy transparency, as well as a comprehensive enforcement mechanism.

The USMCA deal also bolsters protections for workers, establishing for the first time the right of Mexican workers to collective bargaining along with a minimum wage of $16 US set for those workers producing 40-45% of automobile parts.

Migrant workers employed in the U.S., regardless of immigration status, also gain labor protections, while goods produced by forced labor are prohibited from trade.

Signed by President Donald Trump, Canadian President Justin Trudeau and Mexican President Enrique Peña Nieto at the G20 Summit in November 2018 in Buenos Aires, the USMCA deal was ratified by Senate of Mexico in June 2019 on a 114-3 vote.

Following last week’s ratification in the U.S. Senate, Mr. Trudeau announced Tuesday he will submit legislation to ratify the trade deal next week in the Canadian parliament.

Jorge Mendoza Yescas, Consul General for Mexico in Phoenix, spoke to students following the Senate’s Thursday afternoon at ASU West’s Barrett Honors College in Phoenix.

He said legislators in his country also joined in broad support of the measure.

“We know this agreement has been very, very important for the U.S. and Mexican economies and specifically for Arizona,” Mr. Yescas said. “We’ve had Left Wing senators and Right Wing senators who agree on the importance of having this agreement ratified as soon as possible, because it can give a lot of certainty to the economy and it will send a good message to their counterparts in the U.S. and Canada.”

He called Mexico’s economy one of the most open in the world, with 13 standing free trade agreements representing a market of more than 1 billion consumers.

“We have the biggest market in the world with a population in the three countries of 490 million people and the GDP is $23 trillion,” Mr. Yescas said. “The trade between these three countries is around $1 trillion.”

Mr. Yescas said since passage of the original NAFTA in 1992 under President George H. W. Bush, trade between Mexico and the U.S. has grown sevenfold, making Mexico the single largest U.S. trading partner — larger than Canada or China.

“More than 5 million U.S. jobs depend on trade with Mexico here in the states,” he said. “We can see the southern states that border with Mexico — California, Arizona, New Mexico and Texas — they have Mexico as a main partner.”  

Trade with Mexico accounts for 17.2% of California trade, 34.2% of Arizona trade, 50.8% of New Mexico trade and 34.8 of Texas trade. Without NAFTA and its replacement, USMCA, tariffs on American goods could exceed 50%, Mr. Yescas said.

Some high-profile trade associations joined the chorus of support as well, noting the value of North American trade to domestic workers.

Dennis E. Nixon, president and CEO of International Bank of Commerce and chairman of International Bancshares Corporation, issue a statement about USMCA Thursday, according to an Associated Press report.

“USMCA delivers an agreement that will create more jobs, modernize trade in the digital age and foster innovation,” Mr. Nixon stated.

“This agreement will continue to build upon the economic progress we have made for more than twenty-five years and reflects the reality of today’s highly competitive globalized economy. It continues the success of the largest free trade zone in the world.”

Matthew Shay, president and CEO of the National Retail Federal echoed Mr. Nixon’s approbation in a statement, the AP reported Thursday.

“The world has changed dramatically since the United States, Canada and Mexico first agreed to tear down barriers to free trade a quarter-century ago,” Mr. Shay said. “This updated agreement will modernize trade among our closest trading partners and pave the way for continued prosperity across the borders of North America as the global economy continues to evolve. This agreement will support the millions of U.S. jobs that depend on free trade with Canada and Mexico and will ensure the continued availability of affordable everyday necessities for American families.”

After the Parliament of Canada takes up the trade deal on Jan. 29, a vote could come as early as February. The deal cannot take effect until ratification by all three countries.