Governor Ralph Northam recently suggested caution in the face of recessionary concerns: “As the global economy changes, we must be both cautious and strategic.” Those concerns were largely echoed by the actions of Republicans in the General Assembly who made a priority of boosting the state’s cash reserves.
But another way to help build a healthy state economy is expanding Virginia’s international trade, lowering barriers with our most important trading partners, and creating policies spreading the benefits of trade throughout the Commonwealth, both geographically and by industry sector.
Virginia Members of Congress have an opportunity to do just that by ratifying the U.S.-Mexico-Canada Agreement.
Last year, Virginia exported $18.6 billion worth of American-made products across the world, supporting an estimated 78,000 jobs. More than $4 billion of that went just to Canada and Mexico, which purchase more American goods than our next 11 trading partners combined.
With bipartisan support over the last decade, this economic boom has spread across all sectors in Virginia. For example, Virginia’s motor vehicle exports to Canada and Mexico have more than doubled and the Commonwealth’s food and beverage exports to those countries have increased more than three-fold. Small Virginia companies and their employees have been major beneficiaries: Two-thirds of the state’s exporters of transportation equipment to those countries have been small and medium-businesses, as have 61 percent of Virginia’s food products exporters.
In fact, one out of six Virginia manufacturers—including nearly 500 smaller companies—export to Canada and Mexico, and more than 13,200 Virginians depend on those exports for manufacturing jobs paying an average $70,244.
The USMCA is a proposed replacement for the North American Free Trade Agreement (NAFTA), now more than 20 years old. This new agreement, which was signed by the three governments and already ratified by Mexico, will make vital improvements to North American trade while also preserving tariff-free regional trade. It would bring North American trade into the digital, 21st-century economy and provide much-needed certainty to businesses and workers across the country.
NAFTA was in sore need of replacement, having been approved long before the digital revolution of the last two decades. Importantly, the USMCA establishes higher standards for protection of intellectual property, including updated obligations for each country to safeguard patents, copyrights, regulatory data, trademarks and trade secrets against foreign theft.
It also adds an entirely new chapter on digital trade, ensuring a rules-based foundation for businesses to expand online trade and investments safely and securely, and would work to protect employees across North America by ensuring all three countries adhere to core labor standards.
Finally, the agreement for the first time specifically addresses new agriculture technologies to support innovation and reduce trade-distorting policies. And it ensures Virginia’s farmers have new export opportunities in poultry, eggs and dairy, while maintaining access in soybeans and corn.
Unfortunately, trade issues have taken on increasingly volatile tones in recent years—despite the fact that an economy thrives most in an environment of certainty.
But the USMCA is an opportunity to give the American economy confidence in our international commerce. The agreement has bipartisan support from lawmakers in Washington and, most importantly, support from the majority of Americans.
Mexico has already ratified the agreement, and Canada has agreed to follow suit. Now it is up to Congress, where delay and deadlock are too easily the norms.
The Virginia Congressional delegation has an opportunity to offer bipartisan unity in support of a measure of critical importance to Virginia’s economic health, and should work to break the deadlock and pass the USMCA.