A new report from the United States International Trade Commission (ITC) shows that the new U.S. -Mexico-Canada Agreement (USMCA) will improve the U.S. economy more than NAFTA would have, but only slightly.
USA farm groups generally support ratification of the USMCA.
The finding is a big slap to president Donald Trump, who keeps bragging the deal will boost the USA auto industry employment. Both countries have imposed retaliatory measures that have damaged USA exports, especially from farm states. Instead the report addresses other issues that affect trade, such as workers' rights; harmonizing regulations from country to country; and deterring certain potential future trade and investment barriers.
The U.S. Trade Representative said Thursday the new, yet-to-be-ratified deal will bring auto jobs back to the U.S. from Mexico.
In response to the ITC report, U.S. Trade Representative Robert Lighthizer noted the predicted GDP growth rate under USMCA would be twice that projected under the Trans-Pacific Partnership.
As far as USA imports from its two neighbors are concerned, the report projected that imports from Canada will increase by 19.1 billion dollars, or 4.8 percent, and from Mexico, up 12.4 billion dollars, or 3.8 percent. USA agriculture and food exports overall would increase by $435 million.
Additionally, the agreement is seen having a positive impact on all broad industry sectors within the USA economy, with manufacturing experiencing the largest percentage gains in output, exports, wages and employment.
"You might see people beginning to take more concrete positions".
Flavio Volpe, the president of the Canadian Automotive Parts Manufacturers' Association, said that there is no way that the USA automakers came meet the new content requirements for autos with tariffs of 25-per-cent and 10-per-cent on Canadian and Mexican steel and aluminum still in place.
USTR officials said their analysis was based on plans disclosed by automakers to the trade agency for compliance with the new agreement's tighter rules of origin.
Detroit's automakers are rushing to defend a report from the Trump administration that touts the benefits of the new North American Free Trade Agreement.
The ITC's estimates are for year six of the trade deal, once it is fully implemented.
"National Pork Producer Council supports ratification of USMCA, an agreement that preserves zero-tariff access to markets that represent more than 30 percent of total US pork exports", said Nick Giordano, NPPC vice president and counsel, global government affairs. "Members of Congress have said that ratification of USMCA will be delayed and the benefits of the agreement diluted as long as this trade dispute goes unresolved". "We are eager to see the removal of USA metal tariffs that prompted Mexico's 20 percent retaliatory tariffs almost a year ago. Our farmers need zero-tariff trade restored to our largest export market".