Monday, February 10
Modernizing trade brings real benefits to Washington
In December, Washington employers and manufacturers had a number of items on their holiday wish list. The reauthorization of the U.S. Export-Import Bank and the ratification of the United States-Mexico-Canada Agreement (USMCA) were at the top.
It looks like wishes do come true.
When Association of Washington Business (AWB) members traveled to Washington, D.C., for our annual AWB D.C. Fly-in last December, we met with members of Congress from both parties to discuss these and other issues. As one of the most trade-driven state in the nation, Washington has a lot at stake when it comes to trade policy.
The Export-Import Bank plays a critical role in supporting the manufacturing sector. Hundreds of Washington manufacturers rely on its insurance and loan products and services to bring their products to markets around the globe.
We’re not just talking about large corporations. Most companies that use the bank are small- and medium-sized employers located in communities across the state, from Anacortes to Yakima.
Founded in 1934, the Export-Import Bank requires periodic reauthorization by Congress to operate. The most recent reauthorization ended Sept. 30, but the charter was extended through a stopgap spending bill.
Shortly before the D.C. Fly-in, the House passed legislation reauthorizing the bank. About two weeks later, the Senate followed suit. On Dec. 20, President Trump signed a spending package that included reauthorization of the bank through 2026, giving employers the certainty and support they need to enter into export agreements.
A few weeks later, manufacturers, farmers, IT employers and others had a second reason to celebrate as the Senate voted to approve the USMCA, sending it to the president’s desk for signature
The USMCA modernizes the 26-year-old North American Free Trade Agreement (NAFTA). NAFTA removed trade barriers and tariffs between the U.S., Mexico and Canada, allowing trade to flourish among the three countries.
In 2017 alone, Washington exports to Canada and Mexico totaled $7.7 billion and $2 billion, respectively. The state’s top exports included computer and electronic products, processed food, primary metal products and paper.
The USMCA builds on NAFTA’s success while addressing issues that have arisen since the agreement’s passage. It raises standards and improves transparency. It ends anti-U.S. discrimination from foreign governments and supports high-paying jobs for Americans. It improves environmental and labor protections and adds intellectual property provisions.
President Trump, then-Mexican President Enrique Peña Nieto and Canadian Prime Minister Justin Trudeau all signed the USMCA on Nov. 30, 2018, but to make it official, each country’s legislature must ratify it. Mexico’s legislature ratified it in June 2019, and Canada’s is expected to take action in the coming weeks.
The world has changed dramatically since 1994, especially in terms of technological innovation. People were barely using email, and the first iPhone wouldn’t hit the market for another 13 years. A new trade agreement will better meet the needs of today’s global economy.
The combination of the USMCA and extension of the Export-Import Bank charter are welcome news for Washington’s economy and a positive way to start the new year. It’s time to bring trade into the 21st century so our employers, our workers and our economy can continue to thrive.