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house Bill H.R. 5430

Should the U.S.-Mexico-Canada Agreement Replace NAFTA?

Argument in favor

The USMCA will provide a much-needed modernization of the trading relationship between the U.S., Mexico, and Canada. This bipartisan trade agreement will create jobs in the U.S., strengthen American manufacturing & intellectual property, open markets to U.S. exporters, and contains strong enforcement mechanisms to protect labor and environmental interests.

Dicr's Opinion
···
12/19/2019
Now that it has been improved and not just renamed by tariff man let’s get it done. And let’s remove Trump so we don’t have an idiot destroying our democracy. His treatment of our allies and praise for murderous dictators undermines our ability to build strong coalitions to deal with countries like China.
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jimK's Opinion
···
12/19/2019
The USMCA certainly needs some adjusting to assure that it remains an equitable agreement for all counties involved and addresses some key issues like carbon footprint. But, at this time it appears to be generally in the best interests of all of the countries involved- so YEA. The other issues can be addressed separately in the future via negotiations or other legislation- just like NAFTA could have been equitably ‘adjusted’ with none of the drama or economic impact.
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Brian's Opinion
···
12/19/2019
If labor supports it and it will be a better deal for workers in all three countries, then I say we sign it. We need to move forward.
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Argument opposed

While it may be bipartisan, the USMCA doesn’t do enough to open markets in Mexico & Canada to U.S. exporters or contain strong enough protections for the environment and workers. It should include stringent provisions to bind the U.S., Mexico, and Canada to reducing carbon emissions and fighting climate change. The USMCA won’t be an improvement on NAFTA.

Cheryl's Opinion
···
12/19/2019
No longer should any international agreements be signed if they don’t include strong environmental protections. We MUST hold ourselves and our partners hostage to protect the future of our planet and our children’s health and well being!
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Lionman's Opinion
···
12/19/2019
This deal is NAFTA, the substance hasn’t significantly changed. This has been a waste of legislative time and taxpayer money; simply to pay lip service to something that isn’t being changed?
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Jeff's Opinion
···
12/19/2019
No new deals under trumps purview. That asshole was born rich and goes around losing money from one bankruptcy to another. I don’t trust for one second that the “new deal” will be “better” for us OR our partners. I think trump will just be finding clever ways to syphon money out of the taxpayer coffers for himself. He wants to hold all the presidential events at his properties for the same reason. He’s a greedy, arrogant, selfish, stupid son of a bitch. Oh and he’s an impeached criminal. #FactsMatter
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What is House Bill H.R. 5430?

This bill would implement the United States-Mexico-Canada Agreement (USMCA) and replace the North American Free Trade Act (NAFTA) in governing trade between the three nations. The USMCA would reduce tariffs between the three countries, expand market access, protect intellectual property protections, promote manufacturing, and increase opportunities for small businesses. A breakdown of its various provisions can be found below.

AGRICULTURE

  • American dairy farmers will have new export opportunities to sell products (such as milk, cream, butter, skim milk powder, cheese, and other dairy products) into Canada, which will also eliminate its tariffs on whey & margarine.

  • Canada would provide new access for chicken, eggs, and turkey produced in the U.S. 

  • Canada would also eliminate a program that allows dairy products to undercut U.S. dairy sales in Canada & third country markets, and apply export charges to exports of skim milk powder, milk protein concentrates, and infant formula at volumes above an agreed threshold.

  • Canada would agree to grade U.S. wheat imports in the same manner it grades Canadian wheat. Grading standards for food & agricultural products between the U.S. & Mexico would be non-discriminatory.

  • Mexico would not restrict market access for U.S. cheeses with certain names.

  • All other tariffs on agricultural products traded between the U.S. and Mexico would remain at zero.

  • The USMCA would cover all biotechnologies, such as gene editing, and the three nations would enhance information exchange & cooperation on agricultural biotechnology trade matters.

  • The U.S., Mexico, and Canada would agree to not use export subsidies or World Trade Organization special agricultural safeguards for products exported to each other’s market.

  • The U.S., Mexico, and Canada would also agree to non-discrimination commitments regarding the sale & distribution, labeling, and certification of wine & distilled spirits (including continued recognition of Bourbon Whiskey, Tennessee Whiskey, Tequila, Mezcal, and Canadian Whiskey as distinctive products).

MANUFACTURING

  • The USMCA would require that 75% of auto content be made in North America. This would preserve & re-shore vehicle & parts production in the U.S. and spur investment by automakers. At least 40-45% of auto content would have to be made by workers earning at least $16 per hour.

  • Producers autos, auto parts, and other industrial products such as chemicals, steel-intensive products, glass, and optical fiber would be have to meet stronger rules of origin. North American parts & materials would receive preferential tariff benefits.

  • To promote greater use of Made-in-the-USA fibers, yarns, and fabrics, rules allowing for some use of non-NAFTA inputs in textile & apparel trade would be limited.

  • Additional manufacturing sectors that would be covered under new provisions in the USMCA include information & communication technology, pharmaceuticals, medical devices, cosmetic products, and chemical substances.

LABOR MONITORING

  • Mexico would have to take legislative actions to provide for the effective recognition of the right to collective bargaining for workers.

  • A U.S.-Mexico Rapid Response Mechanism would be established to provide for monitoring & expedited enforcement of labor rights under Mexico’s landmark labor reform while respecting sovereignty & due process.

  • An Interagency Labor Committee will actively monitor Mexico’s compliance with labor requirements and report to Congress on them.

INTELLECTUAL PROPERTY

  • Full national treatment would be required for copyright & related rights, so U.S. creators will have the same protections domestic creators receive in a foreign market.

  • Patentability standards & patent office best practices would ensure that U.S. innovators, including small- and medium-sized businesses and pharmaceutical & agricultural innovators are able to protect inventions through patents.

  • A minimum copyright term of life of the author plus 70 years (or 75 years after first publication) would be required.

  • Standards would be established to prevent circumvention of technological protection measures that protect digital music, movies, and books.

  • Customs duties & other discriminatory measures couldn’t be applied to digital products distributed electronically, such as e-books, videos, music, software, or games.

  • Law enforcement would have authority to stop suspected counterfeit or pirated goods at every phase of entering, exiting, and transiting through the territory or any party.

  • Civil & criminal penalties would be established for satellite & cable signal theft.

  • Broad protections would be established against trade secret theft, including against state-owned enterprises.

  • U.S. financial service suppliers would receive the same treatment as local suppliers under most-favored-nation treatment. Market access restrictions would be prohibited.

ENVIRONMENT MONITORING & ENFORCEMENT

  • Harmful fisheries subsidies that benefit vessels or operators involved in illegal, unreported, and unregulated (IUU) fishing would be prohibited. Customs inspections at ports of entry would be enhanced to ensure strong enforcement against IUU fishing.

  • New protections would be established for marine species like whales & sea turtles, while shark-finning would be prohibited.

  • New provisions would be established to improve air quality, prevent & reduce marine litter, support sustainable forest management, and ensure appropriate procedures for environmental impact assessments.

  • The U.S. & Mexico would participate in a separate Environment Cooperation & Customs Verification Agreement to combat trade in illegally taken wildlife, fish, and timber.

SMALL & MEDIUM ENTERPRISES

  • The USMCA would include a first-ever chapter on small- and medium-enterprises (SMEs). It would establish information sharing tools to help SMEs understand the benefits of the USMCA and a SME committee comprised of officials from each country.

  • Rules regarding paperwork, duties, and taxes for express shipments between the U.S., Mexico, and Canada would be reduced to lower burdens on small shipments.

  • Local presence requirements for cross-border service providers would be eliminated, thus enabling SMEs to avoid the unnecessary burden of opening a foreign office in order to do business.

GENERAL PROVISIONS

  • The USMCA couldn’t be used to amend, modify, or invalidate any U.S. federal law or state law.

  • The president or other appropriate U.S. government officials would be authorized to make certain proclamations, put forward regulations, or make changes to tariffs in advance of the USMCA taking effect. 

  • The USMCA will enter into force at least 30 days after the president submits a written certification to Congress that Mexico & Canada will have taken the necessary steps to implement the USMCA on the date specified by the president.

  • Tariffs and duties would be eliminated on goods that originate from USMCA countries unless otherwise specified.

  • If a trade dispute between the parties to the USMCA arises, the formation of a dispute settlement panel would be required.

Impact

Consumers & businesses in the U.S., Mexico, and Canada; and those countries’ governments.

Cost of House Bill H.R. 5430

The CBO estimates that enacting this bill decrease budget deficits by $3.044 trillion over the 2020-2029 period due to increased tax receipts.

More Information

In-Depth: House Ways & Means Committee Chairman Richard Neal (D-MA) offered the following statement when his committee held a hearing on the USMCA:

“The implementing bill before us is the result of many months of negotiations between the House Democrats and Ambassador Lighthizer, and I’m very proud of the outcome we’ve reached… When we assumed the majority this year, we were asked to consider a renegotiated NAFTA that had structural flaws in a number of key areas: enforcement, labor rights, environment, and access to medicines… The improvements to the USMCA that we negotiated finally make the agreement enforceable by preventing a country from being able to block the formation of a dispute settlement panel… Over the 25 years of the NAFTA, there have been 39 petitions filed documenting the exploitation of workers, and zero enforcement actions to remedy those violations. In close partnership with our labor unions and with the robust support of the Ways & Means Committee Democrats, we negotiated improvements to the rules and to our monitoring regime, and we established a new enforcement mechanism… On monitoring, for the first time we have created a proactive monitoring regime for the labor obligations in a trade agreement. The implementing bill establishes an Interagency Labor Committee that will actively monitor Mexico’s compliance and report to Congress… The USMCA will now include the highest environmental standards of any trade agreement and will include a new customs verification agreement to enhancement enforcement… With the dedication of the Working Group Members appointed by the Speaker, we also secured important changes in the USMCA that preserve Congress’s ability to change U.S. law to address the crisis we face with respect to high prescription drug prices. These changes set a new standard for U.S. trade agreements and demonstrate that trade agreements can achieve broad bipartisan support if they empower workers, protect patients’ access to affordable healthcare, and improve our shared environment. I’m proud to support this agreement and the implementing bill before us.”

House Ways & Means Committee Ranking Member Kevin Brady (R-TX) added:

“It goes without question, USMCA is a sorely needed modernization of NAFTA. It has been over 25 years since we updated our trading relationship with Mexico and Canada, and a lot has changed since then. We didn’t have Google in 1994. We didn’t receive news on our smartphones. Netflix didn’t exist. USMCA brings our trading rules into the 21st Century and will be a force multiplier for America’s already strong economy. President Trump and Ambassador Lighthizer have fought hard and delivered on their promise for a pro-growth and modern trade pact. And because of their leadership, we now have a trade deal that will deliver historic wins for our economy. And that’s because this is a trade deal that is all about growth. USMCA will set the stage for billions more in economic activity. It creates, for the first time, rules for competing in the digital economy. With a brand-new digital chapter, American innovators will be empowered to sell goods and services globally, allowing for a stronger American economy. And it pries open Canada’s market for U.S. farmers and ranchers to sell American dairy, wheat, chicken, eggs, and turkey. Our services providers will be able to lock in access to Mexican and Canadian customers. And the agreement is enforceable, allowing us to challenge violations and stopping countries from blocking those challenges, holding Mexico and Canada accountable for these new rules. For America, this means more jobs. It means more customers. And it gives America’s innovators the tools they need to succeed here in America as we compete with countries like China. Independent experts predict this new agreement to spur over $68 billion in new economic activity. More than 176,000 American jobs are set to be created, including 76,000 new auto-sector jobs. And best of all for the American people, USMCA is a truly bipartisan agreement, not a trade deal filled with radical leftist ideas.”

President Donald Trump sent a letter to Congress expressing his support for the USMCA:

“I am pleased to transmit legislation and supporting documents to implement the United States-Mexico-Canada Agreement (the “Agreement”). The Agreement is an important part of my Administration’s efforts to rebalance trade in North America and to modernize our trade relationship with Mexico and Canada. The Agreement will create significant new opportunities for American workers, farmers, ranchers, and businesses by opening markets in Canada and Mexico and eliminating barriers to United States goods, services, and investment. Approving this Agreement is in our national interest. I look forward to the Congress expeditiously approving the legislation.”

U.S. Trade Representative Robert Lighthizer released a statement which read:

“Thanks to President Trump’s leadership, we have reached an historic agreement on the USMCA. After working with Republicans, Democrats, and many other stakeholders for the past two years we have created a deal that will benefit American workers, farmers, and ranchers for years to come. This will be the model for American trade deals going forward.”

The House Ways & Means Committee advanced this bill by unanimous consent.


Media:

Summary by Eric Revell

(Photo Credit: U.S. State Dept. via Flickr / Public Domain)

AKA

United States-Mexico-Canada Agreement Implementation Act

Official Title

To implement the Agreement between the United States of America, the United Mexican States, and Canada attached as an Annex to the Protocol Replacing the North American Free Trade Agreement.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate Passed January 16th, 2020
    Roll Call Vote 89 Yea / 10 Nay
  • The house has not voted
    IntroducedDecember 13th, 2019

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    Now that it has been improved and not just renamed by tariff man let’s get it done. And let’s remove Trump so we don’t have an idiot destroying our democracy. His treatment of our allies and praise for murderous dictators undermines our ability to build strong coalitions to deal with countries like China.
    Like (162)
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    No longer should any international agreements be signed if they don’t include strong environmental protections. We MUST hold ourselves and our partners hostage to protect the future of our planet and our children’s health and well being!
    Like (117)
    Follow
    Share
    The USMCA certainly needs some adjusting to assure that it remains an equitable agreement for all counties involved and addresses some key issues like carbon footprint. But, at this time it appears to be generally in the best interests of all of the countries involved- so YEA. The other issues can be addressed separately in the future via negotiations or other legislation- just like NAFTA could have been equitably ‘adjusted’ with none of the drama or economic impact.
    Like (104)
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    This deal is NAFTA, the substance hasn’t significantly changed. This has been a waste of legislative time and taxpayer money; simply to pay lip service to something that isn’t being changed?
    Like (63)
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    Share
    If labor supports it and it will be a better deal for workers in all three countries, then I say we sign it. We need to move forward.
    Like (56)
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    No new deals under trumps purview. That asshole was born rich and goes around losing money from one bankruptcy to another. I don’t trust for one second that the “new deal” will be “better” for us OR our partners. I think trump will just be finding clever ways to syphon money out of the taxpayer coffers for himself. He wants to hold all the presidential events at his properties for the same reason. He’s a greedy, arrogant, selfish, stupid son of a bitch. Oh and he’s an impeached criminal. #FactsMatter
    Like (51)
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    NAFTA REBRANDING.
    Like (30)
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    This is a disgrace. Barely has any environmental protections. Democrats and Republicans alike should be ashamed of themselves.
    Like (27)
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    The new agreement, USMCA, is essentially NAFTA with a few more worker protections in place. It’s progress. I’ll take it.
    Like (23)
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    Climate Change is a hoax and is nothing more than a way to raise taxes for the Globalist. Climate is cyclical. Always has been always will be. Man cannot change climate, but saving the rain forest will have a much more positive affect for the future as well as protecting the oceans from dumping.
    Like (22)
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    We have to understand that when you are dealing with other people or other countries, unless you are the king of the world you have to compromise to let everyone get something, or no one will get anything.
    Like (22)
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    The senator who opposes this seems to have blinders on. Ah, more like he hates President Trump so much and doesn’t support anything he supports that would actually benefit all of our countries and do good. It’s already been established that Mexico wants it and Canada wants so this should be signed and implemented. Nancy Pelosi has sat on this way too long. Of course we know she and Democrats are waiting and think President Trump’s demise is eminent. Celebrate your victory because a FAIR trial cometh in January! Yeah, Democrats are waiting to tweak it and take credit for it. God’s got an army marching throughout this land, prayer is in our arsenal and we pray God’s deliverance is at hand!!
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    First of all United States-Mexico-Canada Agreement (USMCA) is NAFA just dusted off, a little more works protection, just put the industry and works though hell for no real reason? Things that could have been resolved with out all the drama. Just getting the economy functioning again is great. Agreements on economy are an ongoing for all presidents, Trump likes to bully, intimidate, harass, extort and threaten is his form of negotiation, this is art of the deal, mob boss cartel, Plus it’s show time for him, anytime. As for China we bowered money from China to support the farmers because of the tariffs trump put on China that is causing farmers to go bankrupt? China laughing all the way to the bank!
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    Ninety percent of the new agreement is NAFTA. But the remaining ten percent are improvements to the former. It's a step in the right direction.
    Like (13)
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    Based on the Fact Sheet showing the differences/improvements it should be ratified. The U.S. should provide training/retraining opportunities, job counseling and financial support for displaced workers and not just leave those workers to fend for themselves. There have been companies and their employees displaced as result of trade agreements in the past and that has created much of the anger attributed to trade agreements but people in each of the partners countries lost jobs. Some of the wiser countries retrained their people for new opportunities. This is something the U.S. has not seen fit to do on a large scale.
    Like (12)
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    Good trade agreement with our neighbors.
    Like (11)
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    Fancy that! And actual businessman in the White House getting even more things done to enhance a record setting economy. But let’s impeach him because he is mean and does not say what some want to hear.
    Like (11)
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    Finally a better deal for the American people
    Like (11)
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    Thank God President Trump made this happen with all the great work he and his team put into it. It’s obvious Pelosi wants to take credit because the Democrats need a win. Corrupt Pelosi is like the dumb valley girl who has to cheat off the nerdy smart girl. We see through her FAKE crocodile tears about impeachment. She’s owned, like a prostitute, by powerful deep staters who make her dance to their tune. Drain the swamp!! Trump/Pence 2020! KAG!
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    Hard to say. Anything originating from the trump administration should be suspect.
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