American shippers praise Senate passage of USMCA

The U.S. Senate on Thursday voted overwhelmingly to approve legislation to replace the 25-year-old trade pact among the U.S., Canada and Mexico.

The Senate had been expected to pass the U.S.-Canada-Mexico Agreement (USMCA) Implementation Act (H.R. 5430) since the bill cleared the House of Representatives in December by a vote of 385-41. Eighty-nine senators voted in favor of USMCA; 10 opposed it.

Senate Majority Leader Mitch McConnell, R-Kentucky, called the USMCA “A major win for our country. A major win for the Trump administration.”

U.S. lawmakers became more receptive to passing the USMCA after including additional requirements in the trade deal for intellectual property protections, labor and environmental enforcement, and provisions on trade in pharmaceuticals.

American shippers applauded the Senate’s action and look forward to President Donald Trump signing the legislation into law.

“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,” said National Retail Federation President and CEO Matthew Shay in a statement. “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.”

“We all win under this new agreement,” said Chris Jahn, president and CEO of the American Chemistry Council. “Our unanimous support for ratifying USMCA is a testimony to the collaborative, highly integrated North American chemical manufacturing sector that is uniquely positioned to continue to grow and create new jobs under the new North American trade pact.

“For the United States in particular, companies eyeing the U.S. shale gas revolution and chemical production boom should soon have even greater confidence to invest, knowing that they will be able to trade freely with our industry’s largest trading partners in Canada and Mexico,” Jahn added.

U.S. farmers expect USMCA’s implementation to increase their exports within North America by $2 billion annually.

“This trade agreement comes at a critical time for farmers and ranchers, increasing optimism that we’ll turn the corner in 2020,” said American Farm Bureau President Zippy Duvall in a statement.

The American Farm Bureau noted, for example, that under USMCA, Canada will increase quotas on U.S. dairy products, benefiting American dairy farmers by $242 million. Canada will also treat wheat imports the same as domestic wheat for grading and pricing.

However, some associations remain critical of the USMCA.

The United Food and Commercial Workers International Union President Marc Perrone said the USMCA needs more forceful language regarding country-of-origin labeling of food products.

“Without strong country-of-origin labeling, consumers will be kept in the dark and America’s food workers will continue to face unfair competition from foreign companies not playing by the same rules,” he said in an earlier statement.

The union plans to continue lobbying Congress and the Trump administration for stronger country-of-origin labeling for North American food products, Perrone said.

The Senate’s USMCA vote comes just one day after Trump and Chinese Vice Premier Liu He, in a meeting at the White House, signed the new Phase One trade agreement between the U.S. and China.

USMCA will replace the North American Free Trade Agreement (NAFTA), which entered force on Jan. 1, 1994.

On May 18, 2017, U.S. Trade Representative Robert Lighthizer informed Congress that Trump intended to commence negotiations with Canada and Mexico with respect to NAFTA. Negotiations among the three nations to replace NAFTA concluded in September 2018.

Mexico’s Senate has already ratified the USMCA, while Canada’s Parliament is expected to take up the new trade pact soon.