OP-ED: USMCA to boost U.S. economy, job market, and reduce trade deficit
By Elvira Moreno
After a lengthy back and forth between Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin, the House and Senate finally came together to pass the budget deal before August recess. The budget deal saves military and domestic programs from getting hit with the “sequester” that was a part of the 2011 Budget Control Act while ensuring our country will not default on our loans by suspending the debt limit through July 31, 2021.
But there is still so much more to do before the end of the year. And with the 2020 elections hanging over our heads, the time frame to get something done this Congress gets smaller and smaller.
Of top priority: Congress needs to pass the United-States-Mexico-Canada Agreement (USMCA), a welcome fix to the North American Free Trade Agreement (NAFTA) that will boost America’s economy, the job market, and reduce the trade deficit with Mexico.
The legislation already has some bipartisan support, as Members of Congress on both sides of the aisle haggle over what is hopefully some small, last-minute changes that will make the bill easier to pass. Once passed, we can expect to see positive impacts in several important sectors of the United States economy: agriculture, automotive, e-commerce, and the travel industry. The USMCA is a much-needed update and adjustment to NAFTA that creates more job opportunities and promotes higher wages.
If the House and Senate pass the USMCA, it would be a huge win for the American people in the automotive industry. For example, the USMCA requires that 75 percent of a foreign car that’s sold duty-free in the United States be built with parts made in North America. And according to the United States Trade Representative Office, it’s estimated that the USMCA would create 76,000 new jobs in the U.S. automotive sector over a five-year period. That’s a huge boon for areas of the country that, until recently, had been hard hit by declining manufacturing jobs. Also, it’s expected that new incentives in the trade agreement will result in $34 billion being invested in U.S. automotive manufacturing and $23 billion in new purchases of U.S.-made automotive parts by automakers annually.
The travel and tourism industry, which accounts for 15.7 million jobs, direct and indirect, will also see a boom thanks to the USMCA. According to the U.S. Travel Association, the association for the travel and tourism industry, the USMCA would create 15,000 American jobs in the travel industry and generate $1.7 billion in travel-related economic output. The USMCA is also expected to reduce the trade deficit, according to the White House Trade Adviser Peter Navarro.
In other words, the USMCA is creating jobs and economic growth while helping to decrease our trade deficit - a win-win all around.
But the USMCA isn’t the only game in town. There are other programs and initiatives out there that can further help to lower the trade deficit while creating American jobs and boosting the American economy.
Take Brand USA for example. Brand USA is a public-private partnership that promotes international travel to the United States. And we aren’t just talking about New York City or Los Angeles or other big tourist destinations that easily attract foreign visitors. Brand USA promotes travel to places all across America, no matter the size or the location. And since Brand USA is funded through a fee, international visitors pay through the Visa Waiver Program, Americans reap all the rewards without paying a dime in taxes.
Since 2013, Brand USA’s marketing efforts have been responsible for generating 52,000 American jobs.
And Brand USA is accomplishing its mission. Last year alone, international travel to the United States resulted in $256 billion in exports, which includes general travel spending, international passenger fares, international traveler spending on medical, educational, and seasonal-work related activities. On top of that, Brand USA in conjunction with the tourism industry created a $69 billion trade surplus in 2018 alone - helping to cut back on the trade deficit other industries create.
Unfortunately, Brand USA is now at risk of going away - and taking with it all of those jobs, economic development, and trade deficit offsets - unless Congress acts to save it.
For members of the House and Senate who support the USMCA, it only makes sense that they would support Brand USA’s reauthorization too. Like the USMCA, Brand USA creates jobs, promotes economic growth and reduces the trade deficit. In other words, just like the USMCA, it’s a win-win too. After August recess comes to a close and Congress gavels back in session, I hope both chambers will focus on legislation like the USMCA and Brand USA’s reauthorization that benefits the American economy, the American worker and American families.
Elvira Moreno is a former city councilwoman in Southeast Los Angeles county and President of the North Orange County Republicans.