USMCA Trade Deal: Praises, 'Evils,' Plans

Richard Trumka, Head of The American Federation of Labor and Congress of Industrial Organization (AFL-CIO), has endorsed the revised U.S.-Mexico-Canada Agreement (USMCA) that will replace the North American Free Trade Agreement.

Benzinga · 12/20/2019 11:08

Richard Trumka, Head of The American Federation of Labor and Congress of Industrial Organization (AFL-CIO), has endorsed the revised U.S.-Mexico-Canada Agreement (USMCA) that will replace the North American Free Trade Agreement.

What Happened

After The House of Representatives approved the USMCA deal on Thursday, AFL-CIO Trumka said the new  agreement addresses most concerns of U.S. labor unions, according to Reuters

Trumka, however, also said reversing the evils of NAFTA could take a few years

“This isn’t a perfect agreement; it still has room for improvement. But it is well on its way to getting there,” said Trumka in an interview with Reuters.

Why It Matters

The AFL-CIO estimates the United States outsourced 851,700 jobs to Mexico under the NAFTA.

Numbers from the Office of the United States Trade Representatives show the U.S. had an $80.7 billion goods deficit with Mexico in 2018, while Mexico reported bigger U.S. goods surpluses of an estimated $128.5 billion in the same year.

The U.S., however, had a $1.7 billion goods surplus with Mexico in 1993 – the year before the NAFTA agreement came into force on January 1, 1994.

Reversing the job losses resulting from the 25-year-old NAFTA deal could take eight to 12 years, said Trumka.

“It’s going to take a few years to begin to reverse the bad and the evil that was done by NAFTA, the harm that was done to our economy and to the manufacturing sector,” said the AFL-CIO president.

What’s Next

USMCA could positively impact U.S. industries that rely heavily on cross-border businesses in Canada and Mexico, such as automotive, agriculture, dairy, mining, and pharmaceutical sectors.

U.S. automakers like General Motors Company (NYSE: GM), Ford Motor Company (NYSE: F), and Fiat Chrysler Automobiles NV (BIT: FCA) earlier supported the USMCA agreement, according to Reuters.

Companies in the agriculture sector, such as Archer Daniels Midland Co (NYSE: ADM) and Tyson Foods, Inc. (NYSE: TSN), also stand to gain from the USMCA trade deal, Reuters earlier reported.

Photo Credit: Bernard Pollack via Wikimedia