Published on Jan. 4, 2020
Lately some trade deals with Japan, the European Union and China have been approved, but the main focus for the end of 2019 is the United States-Mexico-Canada Agreement (USMCA). The U.S. House has passed the bill supporting it and the U.S Senate has said it will take it up, hopefully in the middle of January.
As we know, trade deals all take time to get agreements between two countries and much longer if more countries are included. Trade deals are really tough to negotiate as both sides want to gain an edge for their country’s products and there are lots of lobbyists out there wanting a good deal for their groups.
Then, we have the heads of the countries who have made statements they have to back up. There are a lot of lines drawn in the sand, that is, until it gets to be crunch time to approve the deal. No one gets everything they want, but everyone gets some positive parts in the deal.
The trade deal that currently has our attention is USMCA, as this agreement will replace the North American Free Trade Agreement (NAFTA) which some say wasn’t favorable for Wyoming and the region and was more like foreign aid instead of a fair-trade deal.
U.S. Congressman Liz Cheney (R-WY) said, “This USMCA will open countless new opportunities for Wyoming businesses, especially our ag producers, selling our goods like wheat and beef, increasing export opportunities and the thousands of jobs supported by trade in Wyoming. USMCA will also benefit our small and medium sized businesses, who already comprise 67 percent of our state’s exports of machinery to Canada and Mexico.”
She continued, “For too long, NAFTA allowed countries to take advantage of U.S. workers. USMCA, negotiated by the president, is vital to strengthening our relationship with our North American trade partners, while still holding Canada and Mexico accountable.”
While Mexico did hold up the vote at the end for a labor provision and environmental protections in Mexico brought on by a nine-member working group of U.S. House Democrats. I’m not sure why the U.S. has to get into Mexico’s labor reform and their environmental issues, after all they are down river from the U.S. With the new amendments, Mexico will have to ratify the agreement again, but this shouldn’t be an issue.
The new version of the trade deal between the U.S., Mexico and Canada will get rid of controversial protections for biologic drugs entirely, something the congressional Republicans were not happy about. The U.S. already has patent protections for biologic drugs in place domestically, but the Democrats opposed enshrining the protections in the agreement because they want Congress to be able to legislate on drug pricing issues without being bound by the trade deal.
Any trade deal will take time and a lot of hard work as there are many issues to start with. The USMCA was important because Japan, the European Union and China were waiting on the deal getting close to approval before they agreed to a trade deal with the U.S. Hopefully it will help the U.S. in getting more trade deals finalized.
There isn’t a country that gets 100 percent of what they want in these trade deals, but they also don’t get 100 percent of what they don’t want either. It is a compromise where everyone gets the important parts they want.