Tipton: Pass USMCA before Christmas
It has now been over a year since the United States Mexico Canada Agreement was agreed to by both Canada and Mexico, yet Speaker Nancy Pelosi has so far refused to bring the legislation needed to ratify the deal to the floor for a vote.
During that time, Colorado has benefited from the historic economic growth seen across the country, even in rural areas of the state that our district encompasses. Currently, Colorado is enjoying a 2.6 percent unemployment rate while over 43,000 jobs have been created and nearly 67,000 Coloradans have found new jobs. It’s clear that the economy in Colorado is booming, but the reality is that passing USMCA would make the economy even better.
Following the 2008 recession, the federal government was quick to pass bailouts, overhaul the health insurance industry, and overregulate the financial sector to the point where economic recovery took an unusually long time. All these efforts combined led to years of stagnant growth and an arduous recovery, especially in rural areas.
Beginning in 2017, the approach changed and instead the government focused on allowing families and businesses to make their own decisions by lessening the burden of federal regulations. Part of this strategy led to the historic Tax Cuts and Jobs Act getting signed into law, a continued deregulatory agenda, and over the last year, a focus on renegotiating the North American Free Trade Agreement.
NAFTA was first signed into law in 1994 under President Bill Clinton. The agreement was initially set to strengthen the bonds between two of the United States’ biggest trading partners. With newly added trade flows for automobiles, computers, and perhaps, most importantly for Coloradans, agriculture products, NAFTA significantly improved trade flows between our North American allies. In the 25 years since NAFTA was ratified, it has not kept up with an ever-changing economy. In some respects, NAFTA has failed to uphold important trade provisions, especially for Colorado’s agricultural industry.
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For instance, in 2003, Mexico and the U.S. made an agreement on reciprocal market access for American potatoes, in exchange for Mexican avocados. Honoring this commitment potentially means a boost of nearly $100 million in exports for the Colorado potato industry. Over that time frame, Americans have been purchasing more avocados, yet the potato exports to Mexico have remained relatively the same in part to legal challenges in the Mexican court system.
Considering that the average American consumes more avocados in a year than peaches, pears, prunes and nectarines combined, asking Mexico to increase market access for American potatoes seems like a reasonable ask.
Earlier this year, I sent a letter to U.S. Department of Agriculture Secretary Sonny Perdue, requesting that the Trump Administration take into consideration how important the potato industry is for Colorado and that a reciprocal agreement with Mexico be enforced. This is especially relevant while our nation continues finalizing the USMCA.
I am happy to announce that Secretary Perdue responded to my letter recently and shares my concerns on market access for American potato growers. Secretary Perdue acknowledged that Mexico’s Supreme Court intends to consolidate these challenges into one case which should expedite the time frame that this reciprocal deal could be achieved.
While opening access to potato growers in Colorado would be a big win for the local economies, passing larger trade deals with broader sweeping impacts on the American economy should be Congress’ focus before the year ends. We are in a period of strong economic growth, a 50-year historically low unemployment, wages have increased by more than 3% across the country in the last year, and small business confidence remains near all-time highs. Studies show that passing the USMCA would have a significant impact on the economy, building upon much of the success we’ve seen over the last few years.
According to the office of the U.S. Trade Representative, Colorado exported $2.7 billion between Canada and Mexico in 2018 alone. Passing the USMCA will improve trade flows to our allies and greatly benefit small businesses, farmers and all Coloradans who rely on these long-standing trade agreements that bring everyday products to their homes at affordable prices.
A free and fair trade deal is essential to economic certainty in America. Passing the USMCA would be a welcome Christmas present for Coloradans, and we should all continue pressuring Speaker Pelosi to take up a vote before Congress heads home for the holidays.
U.S. Rep Scott R. Tipton represents Colorado’s 3rd Congressional District. His Washington, D.C., office can be reached at 202-225-4761.