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Trump, Dems Reach Agreement on USMCA

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The Trump administration and Congressional Democrats have reached an agreement that will allow the United States-Mexico-Canada Agreement to move forward for Congressional ratification.

“The steel industry welcomes today’s agreement between the administration and congressional Democrats that clears the way for a congressional vote on the USMCA.  Implementation of the USMCA is critical to strengthening the steel industry’s competitiveness in the face of the continued challenges from global excess capacity and weakening demand.  We urge Congress to quickly pass this new trade agreement before the end of this year," said Thomas Gibson, president of the American Iron and Steel Association.

Passage of the USMCA has been a major goal for the domestic metals and manufacturing industries. In October, more than 350 companies and associations wrote to Congress requesting passage of the update to the North American Free Trade Agreement.

“We praise the efforts of United States Trade Representative, Robert Lighthizer, and his team, to renegotiate a robust and comprehensive, North American trade deal that is good for the economy, workers, and steel industries in the region,” said Steel Manufacturers Association President Philip K. Bell. “Now that we have a deal in place, SMA and its members call upon Congress to move quickly towards an affirmative vote on USMCA.”

National Association of Manufacturers was also encouraged by the progress, though acknowledged, as with any deal, it isn't perfect.

"We are extremely disappointed that the agreement missed an opportunity to set the gold standard for the protection of American-made lifesaving innovations and inventions. Protection of intellectual property is a key principle and critical for the long-term vitality of the manufacturing industry and the men and women who work in our sector," said NAM President and CEO Jay Timmons.

"Nevertheless, a ratified USMCA will deliver increased certainty for manufacturers—especially for the 2 million manufacturing workers whose jobs depend on North American trade," Timmons said.

On the labor side, the United Steelworkers expressed support for the changes to the USMCA, which the union believes was an improvement on NAFTA.

“The original USMCA required changes in Mexican labor law that we supported, as they were clearly better than current law. But the agreement had no clear path to ensure that workers’ rights would be safeguarded," said Thomas Conway, president of USW International.  “The updated draft agreement now has enforcement provisions that can help make a difference.   There is still a great deal of work to do in terms of implementing, monitoring and enforcing the provisions, but the base for progress is there."

In Canada, the USW welcomed improvements in the revised agreement, but raised concern over the impact on Canadian aluminum and steel workers.

The USW advocated for requirements that 70 percent of steel and aluminum components in automobiles be melted/smelted and poured in North America in order for a vehicle to enjoy CUSMA benefits.

"It appears that the Canadian government did not insist on a fix to the CUSMA auto rules of origin that would require aluminum automobile parts to use aluminum smelted in North America. This is profoundly disappointing, given that Canada is by far the largest producer of aluminum on the continent. This will allow countries like China, Russia and others to continue to flood the North American market, threatening aluminum jobs in Canada," said Ken Neumann, USW national director for Canada.

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