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January 16, 2020 12:45 PM, EST

Senate Passes USMCA Trade Deal

United States President Donald Trump by Evan Vucci/Associated Press

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A new trade deal with Canada and Mexico was approved in the U.S. Senate on Jan. 16, marking a significant accomplishment for President Donald Trump on his long-discussed desire to update the Clinton-era North American Free Trade Agreement.

The Senate’s 89-10 vote occurred prior to the chamber proceeding with the impeachment trial of the president. Trump had signaled the possibility of signing the new deal within days of the vote.

The overwhelming support the plan received in the Senate represented a rare show of bipartisanship on a policy proposal.

Sen. Chuck Grassley (R-Iowa)

Grassley

“The USMCA creates the first U.S. free trade agreement with a digital trade chapter. These important measures will help the $1.3 trillion U.S. digital economy to flourish and grow. It improves efforts to stop importers of counterfeit goods from ripping off consumers, producers and content creators,” Sen. Charles Grassley (R-Iowa), chairman of the tax-writing Finance Committee, noted prior to the vote. “It provides for copyright and patent protections to uphold trade secrets and to secure data rights so American ingenuity and innovation will drive economic growth, create jobs, drive up consumer choices and drive down prices for goods and services.”

“The United States can’t lose shelf space to very, very competitive markets and then come back years later and try to regain it,” added Sen. Maria Cantwell (D-Wash.), the ranking member on the panel with jurisdiction over commercial transportation policy. “Let’s be a world leader in establishing the rules for fair trade and pushing for provisions like we see in the agreement so we can move forward in making sure Washington products, U.S. products, American-made products, get delivered to a growing, wealthier world.”

Sen. Pat Toomey (R-Pa.)

Toomey

Leading the chamber’s opposition to the trade deal was Pennsylvania Republican Sen. Pat Toomey. “NAFTA needed to be updated because it’s an old agreement and the economy has changed, but that’s not the real reason that this agreement was renegotiated,” Toomey said this month. “The real reason was because we have a trade deficit with Mexico, and the administration deemed that to be unacceptable.”

Trump has been a staunch critic of NAFTA, despite repeated claims from its backers that it paved the way for a multitrillion-dollar trading alliance between the United States’ neighbors to the north and south.

The new deal reached the floor of the Senate after House Democratic leaders and the White House spent months negotiating various terms of the deal. At issue were Mexican labor laws, environmental regulations and enforceability of the pact.

The House of Representatives passed the deal Dec. 19.

The deal could potentially raise government revenue by $2.97 billion from fiscal 2020 to 2029, according to the Congressional Budget Office.

A diverse group of stakeholders, ranging from the commercial transportation sector to the business community, praised Congress’ approval of the deal.

“Trade is central to the trucking industry — 76% of all surface freight between the U.S. and our nearest neighbors moves by truck — so the newly ratified USMCA will be a boon to our economy and our industry,” said American Trucking Associations President and CEO Chris Spear. His group anticipates truck movement to grow after the implementation of USMCA. In 2018, trucks moved more than $770 billion worth of goods between the three countries, according to ATA.“This agreement will boost both U.S. exports and gross domestic product, meaning more truck movements and delivering measurable returns for our industry.”

“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,” added National Retail Federation President and CEO Matthew Shay. “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.”

Corn Refiners Association President and CEO John Bode called the new deal “critical to the modernization of North American trade and the future prosperity of American farmers, workers and businesses. Also, pushing USMCA across the finish line will make America safer and more secure through strengthened relationships with our national neighbors.”

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