USMCA: Good For Virginia’s Economy

USMCA: Good For Virginia’s Economy

By Brett Vassey  |  Jefferson Policy Journal

International trade is now a regular topic of conversation across the Commonwealth and the U.S.   Last year, Virginia manufacturers exported $15.11 billion in goods.    In particular, the U.S.-Mexico-Canada Agreement (USMCA) will accomplish what many thought impossible nearly a year ago – freer markets and fairer trade.  Now, Congress has to do its job and ratify the USMCA trade agreement to secure the future of international trade for all Virginians.

The USMCA will replace the 25-year-old North American Free Trade Agreement (NAFTA).  Virginia manufactured goods exports to just Canada and Mexico was $4.11 billion last year which represents nearly 27% of Virginia’s total manufactured goods exports.  So it is critical that Congress assures us a future in which we can compete fairly with our primary trading partners.  Elected officials need to be reminded that the USMCA’s ratification is not just about companies – 20% of all manufacturing employment in VA depends upon international trade.  The average annual compensation of manufacturing workers is also over $70,244 per year.  We also find that some folks may want to discount the USMCA as only benefiting larger companies but 86% of Virginia’s exports are from small businesses.

There are also some specific provisions of the USMCA that are important to highlight.  It has added protection and enforcement of intellectual property rights; it addresses non-tariff barriers related to trade in re-manufactured goods, import licensing, and export licensing; its rules of origin encourages more goods and materials to be manufactured in the United States; it contains the strongest regulation of digital trade of any international agreement; and, its new enforceable labor
standards will level the playing field for American workers.

The Virginia Manufacturers Association (VMA) is committed to increasing Virginia manufactured goods trade 50% by 2025 and the USMCA is part of that goal.  The VMA’s Commerce Committee will continue to monitor the USMCA and other trade agreements to advise the VMA Board and membership. Additionally, the VMA is a founding member of the Virginia International Trade Alliance (VITAL) and offers international trade assistance and resources to members through the trade network of the Virginia Economic Development Partnership.  The VMA is also developing a new program to assist members that are adversely impacted by imports through leveraging US Trade Act resources to compete in the global economy.

The USMCA will require compromise and an acknowledgment that no agreement is perfect.  It will also require a Congressional translator to explain bipartisanship.  The USMCA is many things, but it is not “Red” or “Blue” or “Republican” or “Democrat” or “Democratic/Socialist,” it is purely a business deal for the betterment of the people and manufacturers in the United States, Canada and Mexico.  Every business – large or small — should encourage Virginia’s Congressional delegation to ratify the USMCA – it is pro-manufacturing, pro-worker and pro-small business.

Brett Vassey is President & CEO of the Virginia Manufacturers Association.

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