Q: Why is the USMCA trade agreement so important for Iowa?

A: Since passage of the original free trade agreement with our northern and southern neighbors, goods and services exported from Iowa to Canada and Mexico have expanded our state economy and created jobs. Just in 2017, Iowa exported $6.6 billion worth of exports to Canada and Mexico, supporting 130,000 jobs. The income and paychecks generated from foreign trade circulates throughout our communities, creating economic vitality and expanding opportunity for Iowans.

Last November, the Trump administration brokered an improved trade agreement with Canada and Mexico to modernize the 1993 North American Free Trade Agreement (NAFTA). The new United States–Mexico–Canada Agreement (USMCA) strengthens our access to the Canadian and Mexican markets and sets new standards on 21st century trade issues, such as digital trade and data flows, state-owned enterprises, and currency. Notably, American agricultural producers will maintain duty-free access to Mexico and will gain increased duty-free access to the Canadian dairy, egg, and poultry markets.

Foreign trade is a major engine of economic expansion that Iowa needs to continue generating prosperity for our farmers, workers, businesses, and communities. According to the U.S. International Trade Commission, USMCA will increase real GDP by $68.2 billion, create 176,000 new jobs in the United States and boost American agricultural and food exports by $2.2 billion. To take effect, the USMCA must be ratified by the U.S. Congress and the legislatures in Mexico and Canada. While Mexico already ratified the USMCA in June, the trade pact awaits approval from Congress and from the Canadian parliament.

Q: What are you doing to get USMCA ratified?

A: As chairman of the Senate Finance Committee, which has jurisdiction over international trade matters, I strongly support USMCA and have been persistent in working both publicly and behind the scenes to build bipartisan, bicameral support for its ratification. This summer, I personally met with House Speaker Nancy Pelosi to encourage and support her efforts to collaborate with the Trump Administration to forge a path for the necessary bipartisan vote to ratify USMCA. I convened a Senate Finance Committee hearing in July where former U.S. Secretary of Agriculture Tom Vilsack testified in strong support of the USMCA. In his current role as president of the U.S. Dairy Export Council, the former Iowa governor has a deep appreciation for the significant value of exports to the bottom lines for Iowa food producers and processors. These efforts are to show members of Congress and the public that USMCA is a win for the American people, and that they should support its ratification when Congress returns from the August state work period.

The 25-year legacy of NAFTA has yielded a powerful economic alliance and unprecedented opportunity and prosperity for North Americans. For example, in June, nearly 1,000 U.S. food and agricultural groups made their case to Congress to ratify the USMCA as swiftly as possible. The coalition wrote that “U.S. food and agricultural exports to Canada and Mexico have more than quadrupled — growing from $9 billion in 1993 to nearly $40 billion in 2018.” Grooming these markets for the past quarter-century has fostered increased demand for high-quality U.S.-grown food commodities, as well as many other American-made products and services.

By ratifying USMCA, Congress can send a strong signal to these two critical export markets: the United States is a reliable supplier and trading partner. It also would inject a dose of much-needed certainty to rural Americans struggling to withstand a five-year downturn in the farm economy. Congress has an important opportunity to secure a lasting economic victory with ratification of the USCMA. I appreciate Speaker Pelosi’s efforts to educate new members of the Democratic caucus in the House of Representatives about USMCA and to work with the Trump Administration to resolve their outstanding concerns. I’m confident she wants to see USMCA ratified. It’s good trade policy. If necessary, I also remain open to workable, bipartisan ideas to make USMCA even better, as long as such ideas are targeted and won’t jeopardize the overall deal. As Secretary Vilsack testified before the Senate Finance Committee, “America’s agricultural economy relies on a predictable, transparent and rules-based system of international trade to provide certainty and opportunities to grow. A swift ratification of USMCA will signal to the rest of the world that the U.S. values our free trade relationships and we are open for business.”

I encourage Iowans to spread the word to their elected representatives and to federal officeholders seeking the Oval Office that Congress needs to pass USMCA. In the meantime, I’ll continue working to forge a bipartisan, bicameral consensus in Congress to ratify the USMCA sooner, rather than later.

Charles Grassley

Author: Charles Grassley

Chuck Grassley of New Hartford has represented Iowa in the United States Senate since 1980.