Business owners know that market access is central to their success. A quick look at the math shows why: The United States makes up only 5 percent of the world’s population, so the ability to access the other 95 percent of the world is critical to allowing businesses to achieve their full potential. And when it comes to manufacturers in America, there are no more important trading partners than Canada and Mexico.
In Arizona, cross-border trade, particularly with Mexico, is vital to support industries and communities as well as the international partnerships that bring our countries together. To provide renewed certainty and improve many aspects of the trading relationship, manufacturers are calling on Congress to ratify the United States–Mexico–Canada Agreement as soon as possible. The stakes are high. Canada and Mexico alone purchase more from the United States than our next 11 trading partners combined. And trade with those two countries supports 12 million jobs, including more than 2 million manufacturing jobs and more than 40,000 small and medium-sized businesses.
The National Association of Manufacturers recently released state fact sheets highlighting the importance of North American trade to manufacturing. Put simply, the industry relies on sound trade policies with Canada and Mexico—and our country relies on the success of the industry. One in five Arizona manufacturing firms export to Canada and Mexico, and nearly three-quarters of those are small and medium-sized businesses. Taking a step further back illustrates the larger picture: Canada and Mexico alone purchase more than two-fifths of Arizona’s total global manufacturing exports. Without a free trade agreement, Arizona’s manufacturing exports could face more than $2 billion in tariffs, raising the prices on the state’s exports and reducing the region’s international competitiveness.
The business implications are clear, but what cannot be overlooked is how much workers and communities rely on sound international trade policy. More than 19,000 Arizona manufacturing jobs depend on exports to Canada and Mexico. This includes jobs across industries—everything from electrical equipment and components, to metal products and motor vehicle parts, to communications equipment and chemicals, and more. These are well-paying jobs, too. Manufacturing jobs in Arizona pay, on average, $82,321 a year in wages and benefits compared to $43,759 for workers across all private nonfarm industries. Workers and businesses are calling on Congress to do what is right for their jobs and the economy by ratifying the USMCA.
It has been 25 years since NAFTA was enacted. Since that time, manufacturing output has more than doubled, and exports to Canada and Mexico have tripled. Meanwhile, as our economy has shifted considerably, NAFTA has been stagnant. The USMCA will improve NAFTA in areas where it hasn’t kept up, strengthening and modernizing rules to rev up America’s innovation engine, expanding access to Canada and Mexico and leveling the playing field for manufacturers in the United States.
Notably, the USMCA includes new best-in-class rules to strengthen protection and enforcement of the full range of intellectual property rights important to manufacturers and their workers in the United States, from patents, trade secrets and trademarks to copyright and regulatory data protection that are critical to all Arizona and U.S. innovative manufacturing industries. It will add a new best-in-class digital trade chapter that prohibits unnecessary barriers on the movement of information and data, the forced localization of information technology infrastructure or the forced disclosure of source codes that are important to small manufacturers using the internet as their global storefront and to all manufacturers relying on or creating new technologies. And it contains new chapters on good regulatory practices and technical barriers to trade as well as sanitary and phytosanitary measures that will set new standards for trade agreements around the world.
Arizonans deserve the opportunity for stability in their jobs, success in their business and a strong national economy. By ratifying the USMCA, Congress can do their part toward achieving those critical ends for businesses across the state and across the country.
Linda Dempsey is the Vice President of International Economic Affairs for the National Association of Manufacturers