US-Mexico-Canada Trade Agreement Is Critical To American Prosperity
The United States-Mexico-Canada Agreement (USMCA) or “NAFTA 2.0,” does more than open markets for goods and improve regional competitiveness. It also creates a framework of continued partnership with our neighbors who we share a border with, which is vital to America’s security and economic prosperity.
However, the agreement can’t take effect until Congress votes to ratify it. I would call on my colleagues in Congress to recognize the implications of doing so and to take action.
The United States has more immediately at stake with Mexico than any other country in the world. Collaboration with our southern neighbor on drug trafficking, immigration, democracy promotion, trade, and investment have become imperative for the U.S. economy and our national security. When NAFTA was signed in 1994, it created the foundation to build our partnership with Mexico into what it is today.
Twenty-five years later, Mexico’s democratic institutions have strengthened, its citizens have a more positive perception of the U.S., and Mexico is an economically stable hub for investment, with more free trade agreements than any other country in the world.
Mexico now cooperates with the United States on migration, counter-narcotics, organized crime, terrorism, and cyber security. USMCA addresses the domestic political challenges due to the disruptions NAFTA caused such as job displacement, and ratifying this agreement will ensure we can build on the gains we have made with Mexico in the last 25 years.
A stable Mexico directly translates to a safer and more secure southern border, and Mexico’s economy has greatly improved due to NAFTA, keeping migrants at home and protecting the United States from the harms that illegal immigration can cause. There are now more Mexicans returning to Mexico than migrating to the U.S. Moreover, NAFTA has helped build a framework to work with Mexico.
Over the past several years, the United States’ partnership with Mexico has led to the creation of multinational strategies such as the Merida Initiative that build capacity and combat regional security threats. This type of cooperation was unthinkable 25 years ago, but has been instrumental in the fight against drug trafficking and organized crime. This security cooperation enables us to partner with Mexico to face evolving threats today, including the large numbers of Central American migrants coming across our shared border. By working together, we can strengthen the southern border and keep American citizens safe.
Our businesses benefit directly from the economic success of Mexico. Over 70 percent of Mexico’s total imports come from the United States totaling $265 billion worth of U.S. goods in 2018, and another $34 billion in services. Moreover, 70 percent of the parts in a typical Mexican product originate in the United States. If Mexico succeeds, the U.S. economy benefits.
The United States is the largest source of Foreign Direct Investment (FDI) in Mexico, which opens markets for U.S. businesses and investors, and is a key driver of development. FDI in Mexico has improved the global competitiveness of American manufacturing industries by creating supply chains. United States FDI in Mexico increased from $15.2 billion in 1993 to $109.7 billion in 2017. This investment has played an important role in Mexico’s stable development, and USMCA includes provisions to enhance this investment relationship.
Over the last 25 years, NAFTA has been a key driver of U.S.-Mexico collaboration to promote economic prosperity and security. The USMCA can build on this partnership while improving trade outcomes for Americans. The key role of a strong relationship between the United States and our southern neighbor, Mexico, cannot be overlooked.