A think tank backs renewing USMCA, the trade agreement linking the United States, Mexico and Canada.
USMCA Renewal: Think Tank Urges Changes to North American Trade Deal
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The United States-Mexico-Canada Agreement (USMCA) sets trade rules among the three countries. The Competitive Enterprise Institute, once an opponent, now supports renewal with changes to simplify the deal. Laurel Bower reports on economist Ryan Young's recommendations and concerns about how tariffs affect farm exports, equipment costs and trade stability.
Transcript
This summer, the U.S. declined to renew the USMCA at its first joint review. Now the Competitive Enterprise Institute, a free-market oriented think tank, is calling for changes that make the 2020 deal free, simple and stable.
Ryan Young/Senior Economist, Competitive Enterprise Institute: “Trade policy is in a very volatile place. And one thing that trade agreements offer is stability."
The Institute opposed USMCA when it was first negotiated. Now CEI supports renewal.
Ryan Young/Senior Economist, Competitive Enterprise Institute: “We're seeing tariffs on anything and everything. We're seeing retaliatory tariffs that are killing farmers’ export markets, raising prices for equipment, raising consumer prices.”
The group says all three countries have come out ahead on the deal but there’s room for improvement.
Ryan Young/Senior Economist, Competitive Enterprise Institute: “Mexico has a comparative advantage when it comes to labor-intensive manufacturing. The US has a comparative advantage when it comes to design. Canada has its own comparative advantages in agriculture and energy.”
Mexico and Canada are the United States’ top two trading partners, and CEI argues deals between them should stick to trade, avoiding subjects like intellectual property and labor conditions which have complicated trade talks with China. Young says a simpler and smaller pact in North America would make it easier for all sides to agree.
Even without renewal, the USMCA stays in place until 2036, with a chance to revisit the policy every year.
For Market to Market, I’m Laurel Bower.
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