CSCMP's Supply Chain Quarterly
Global
February 21, 2020
Forward Thinking

Industry praises efforts to move USMCA forward

Comment
Retailers, truckers hopeful as the renegotiated trade deal with Canada and Mexico moves ahead following lawmakers' compromise agreement this week.

Industry leaders are praising lawmakers' efforts to move the ball forward on the United States-Mexico-Canada Agreement (USMCA), following Tuesday's announcement that House Democrats and the White House had reached a compromise on the trade deal between the countries.

Lawmakers said Tuesday they had agreed on revisions to the deal, including changes that address the environment, labor, and enforcement issues. The USMCA updates and replaces 1994's North American Free Trade Agreement (NAFTA). Both sides touted the new deal as a win for American workers, and supply chain leaders agreed, pointing to the consumer economy and labor growth as key benefits.

"Leading retailers welcome the trade deal agreed to by our North American neighbors," Brian Dodge, chief operating officer and incoming president of The Retail Industry Leaders Association (RILA), said in a statement Tuesday. "Retailers rely on complex global supply chains to ensure customers have access to the products they desire at the best possible price. This deal is vitally important to grocers who rely heavily on trade with Mexico to supply affordable produce to American families."

Leaders at the National Retail Federation (NRF) echoed those sentiments.

"The USMCA takes many important steps to modernize the agreement to reflect today's global and digital economy," NRF President and CEO Matthew Shay said in a statement. "This agreement could not come at a better time and provides certainty for U.S. retailers that rely on the North American market, including those that operate in Canada and Mexico. It also ensures American families can continue to have access to a wide range of high-quality products at prices they can afford." 

Industry leaders have pointed to two key issues that will benefit the economy under the USMCA: zero-tariff requirements for how much of a product must be made or sourced in the United States (part of the agreement's "rules of origin" requirement) and new rules on e-commerce and the digital economy, which were not addressed under NAFTA.

The USMCA has been awaiting ratification since it was agreed to by leaders in the United States, Canada, and Mexico more than a year ago. Tuesday's agreement brings the issue closer to approval, although it is still unclear when a vote will take place in Washington. Democrats indicated the issue would be taken up in the House this month, but Senate leader Mitch McConnell (R-Ky.) said late Tuesday that it is unlikely to come before the Senate before the end of the year. Canada and Mexico still need to approve the deal, as well.

In addition to retail, the trucking industry weighed in on the benefits of the deal to drivers and the economy.

"Now with a clear path to USMCA's ratification, this is an historic victory for truck drivers, motor carriers, and the entire American economy," Chris Spear, president of the American Trucking Associations (ATA) said in a statement issued Tuesday. "The vast majority of trade in North America moves on truck, with $772 billion worth of goods crossing our borders with Mexico and Canada every year. USMCA will provide the certainty our industry needs while ensuring the United States remains competitive on the world stage."  

ATA Chairman Randy Guillot added that the USMCA will drive revenue and create jobs in the trucking sector. 

"Trade with our two closest neighbors supports nearly 90,000 Americans in trucking-related jobs and generates $12.62 billion in annual revenue for our industry," Guillot, president of New Orleans-based Triple G Express Inc., said in a statement. "As USMCA deepens our economic ties, we expect these figures—like our economies—to continue to increase."

Victoria Kickham, an editor at large for Supply Chain Quarterly, started her career as a newspaper reporter in the Boston area before moving into B2B journalism. She has covered manufacturing, distribution and supply chain issues for a variety of publications in the industrial and electronics sectors, and now writes about everything from forklift batteries to omnichannel business trends for Supply Chain Quarterly's sister publication, DC Velocity.

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