WASHINGTON (Dec. 10, 2019) – The R Street Institute applauds the conclusion of negotiations between the U.S. Trade Representative (USTR) and House Democrats over changes to the United States-Mexico-Canada Agreement (USMCA). If approved by Congress, the USMCA would replace the North American Free Trade Agreement (NAFTA).

R Street Trade Policy Counsel Clark Packard said, “Despite misleading rhetoric from irresponsible politicians, NAFTA is a successful trade pact. Though not perfect, NAFTA has produced small but meaningful economic gains for the United States, Canada and Mexico. It has been 25 years since NAFTA was enacted into law, so it could stand to be updated to meet the realities of modern commerce.”

As we have explained in the past, the USMCA is a flawed agreement that needs to be improved. Though the USMCA included strong provisions on digital trade, the agreement’s overly generous biologics provisions should be removed, the sunset provision is troublesome and should be struck from the agreement, the automotive rules-of-origin will be costly to comply with and the enforcement mechanism needs to be altered.

We look forward to reviewing the changes to the USMCA to determine whether it merits congressional support. After several years of unnecessary saber rattling about the future of NAFTA, policymakers need to provide certainty to the valuable North American commercial relationship. We hope the USTR and House Democrats have produced an agreement worthy of support.

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