WASHINGTON — The U.S. Senate Appropriations Committee voted nearly unanimously to move the United States-Mexico-Canada Agreement Implementation Act, or USMCA, closer toward a vote on the Senate floor.
The committee voted 29-2 on Wednesday in favor of the trade agreement between the three North American countries in a deal that is being called the “New NAFTA” or “NAFTA 2.0.”
According to Senate Majority Leader Mitch McConnell (R-KY), Senate committees are wrapping up the consideration of the trade deal.
“Very soon, we hope the Senate will be able to vote on the floor and put this landmark accomplishment on the president’s desk,” McConnell said.
Several aspects of the agreement make an updated trade deal for the 21st century due to provisions and enforcement measures that protect e-commerce, intellectual property and environmental protections.
“Protecting intellectual property has greatly advanced this USMCA agreement and allows for enforcement on the border for both sides on intellectual property,” Sen. James Lankford (R-OK) said after the Appropriations Committee vote.
USMCA includes provisions to deter online piracy, extends the minimum protections of industrial designs to 15 years and ensures a ten-year data protection period for agricultural chemicals.
Intellectual property protection provisions have been a hot topic in trade, especially in regards to dealing with China.
“In the USMCA, they’re good. In the China deal, it’s the first step,” Lankford said. “China has been unwilling to do anything with intellectual property until now.”
The first paragraph of the China deal signed Wednesday morning by President Donald Trump and China’s Vice Premier and lead negotiator, Liu He, detailed intellectual property protections. Paragraphs and subsections map out deterrents and mechanisms to report theft of trade secrets, respecting copyrights, patent terms and beefing up border security to stop intellectual property from exiting China’s borders.
Additionally, the new trade deal with China is set to total $200 billion in Chinese purchases within a designated two-year window that closes on Dec. 31, 2021. Using 2017 purchase numbers as a baseline, purchases by China of U.S. agriculture goods will increase by $12.5 billion in 2020 and further to $19.5 billion in 2021. Some of the key commodities purchased are expected to be pork, soybeans and poultry.
In regards to agriculture and USMCA, the deal is expected to help expand exports in several areas; including, among others, wheat, pork, poultry, dairy and soybeans.
“All [agriculture] benefits from [USMCA] because it provides stable marketing in North America. There’s been uncertainty in the market for the last couple of years at this point, so everybody benefits from it, but wheat is the biggest beneficiary,” Lankford said.
In the past Canada has marked U.S. wheat exports at a lower grade compared to Canadian wheat. USMCA ensures downgrades will not continue, which could lead to more profit for Oklahoma farmers. Additionally, the agreement will help the pork industry that has been a target of Mexican tariffs.
“The other big beneficiary for the USMCA is actually pork, because there’s been a lot of retribution I should say in tariffs on it — and where the Mexicans have targeted specifically as been the pork area,” said Lankford. “While wheat we get to expand into a market, in pork we get to stabilize that market in Mexico.”
Canada and Mexico are the two largest buyers of American agriculture products as they combine for nearly 65% of total U.S. agriculture exports. Additionally, the neighboring countries are major trade partners with Oklahoma as the state exported $2.4 billion in goods and services in 2018.
USMCA also adds environmental protection provisions for clean water infrastructure on the U.S.-Mexican border, environmental infrastructure improvement and labor law reform. Similar tenants had been applied in the past, but they were not implemented successfully.
“It takes some of those agreements that they have agreed to in the past and said ‘we’re going to now treat them as a trade issue, if you’re not following through on your environmental issues we can add additional tariffs on you to put some penalties on you until you actually follow those environmental policies,’” Lankford said.
However, some Senators do not feel that the environmental protections are enough as they see too little to quell air-pollution, lack of protection for the oceans and skepticism on the actual follow through on enforcement. Sen. Sheldon Whitehouse (D-RI) called the agreement the, “most improved from terrible, horrible and no good.”