Trade with Canada and Mexico is crucial to Ohio’s economy. The annual value of Ohio’s exports to these countries exceeds $25 billion and covers a wide range of industries supporting tens of thousands of jobs across the state. Unfortunately, the United States, Canada, and Mexico haven’t comprehensively addressed trade issues since the mid-1990s. We need a 21st Century Agreement for the 21st Century economy. That is why President Trump renegotiated the North American Free Trade Agreement (NAFTA) and seeks to replace it with the United States-Mexico-Canada Agreement (USMCA).
I serve on the Intergovernmental Policy Advisory Committee on Trade (IGPAC), which provides policy advice to the U.S. Trade Representative. I have therefore been able to represent Ohioans’ interests as our nation’s trade agreements are discussed, evaluated and renegotiated. Based on this experience, I am confident that USMCA is a better deal for the people of Ohio. That is why I recently sponsored Senate Resolution 376 urging Congress to ratify USMCA. The State Senate has passed this resolution, and I am now encouraging other states across the country to do the same.
The benefits of the USMCA are significant. Non-partisan analysis by the International Trade Commission shows that USMCA will add $68.2 billion in GDP to the U.S. economy. It will spur 176,000 new jobs, including 76,000 jobs in the U.S. auto industry.
USMCA is good for Ohio’s manufacturers and workforce. Updated rules of origin will encourage more goods and materials to be manufactured in the U.S. This ensures that the benefits of USMCA flow to North American workers. Specifically, USMCA encourages both U.S. manufacturing and regional economic growth by requiring that 75 percent of auto content be made in North America. This will result in supply chains that use products made here. That is great news for Ohio, where we have suffered job losses from auto plant closures in areas like Mansfield, and more recently, Lordstown.
USMCA closes gaps in NAFTA that resulted in the outsourcing of U.S. jobs. In the auto industry, the agreement requires that at least 40-45 percent of auto content be made by workers earning at least $16 per hour. This helps U.S. workers by removing the incentive to outsource jobs to cheaper foreign labor. This also raises wages for workers in Mexico, ensuring that they earn a fair wage. This presents a win-win scenario for both countries.
The auto industry is just one example. USMCA has provisions dealing with a range of industries such as steel, textiles and apparel, chemicals, and glass and optical fiber. It will have long term benefits for Ohio manufacturing. That’s why the Ohio Manufacturers’ Association supported SR 376 and testified that “the passage of USMCA is critical to the continued success of manufacturing in our state.”
USMCA also increases market access for Ohio exports. An important example is an agriculture. Ohio’s agricultural exports to Canada and Mexico are valued at $3.6 billion annually and support more than 29,200 Ohio jobs. Under USMCA, these exports will increase as Canada eliminates a milk-pricing scheme that discriminates against U.S. products, and U.S. poultry producers gain new access for poultry and egg exports. Agricultural groups ranging from the Farm Bureau to the Pork Council to the Soybean Association were unanimous in their support for SR 376 and the ratification of the USMCA.
Finally, USMCA recognizes the fundamental role of small businesses in our economy. Canada and Mexico are the top two export destinations for U.S. small and medium-sized enterprises, and we need a trade agreement with policies that work for smaller employers, not just large multinational corporations. USMCA does this. It is the first U.S. trade agreement with a chapter dedicated to helping small and medium-sized enterprises cut through red tape and tap into foreign markets.
USMCA is a better deal for Ohio workers, producers, farmers, and innovators. Congressional leaders must stop playing partisan games. It’s time to put people ahead of politics. It’s time to ratify USMCA.
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Senator Obhof represents the 22nd Ohio Senate District, which encompasses all of Medina, Ashland and Richland counties as well as portions of Holmes county. He currently serves as President of the Ohio Senate. For more information, visit www.ohiosenate.gov/obhof.