USMCA could add 176,000 jobs and raise GDP by $68.2B

June 2019

Tyson Fisher

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The U.S. International Trade Commission released its much anticipated analysis of NAFTA 2.0, formally known as the U.S.-Mexico-Canada Trade Agreement or USMCA. In short, the commission found USMCA will yield a positive effect on U.S. GDP and employment, albeit a small one.

On April 18, the International Trade Commission published its nearly 400-page report detailing the likely effects of USMCA if it were to be implemented. The analysis will likely guide Congress when the issue comes to a vote.

At the larger scope, the analysis estimates that USMCA would raise U.S. GDP by $68.2 billion or 0.35%. Employment in the U.S. would increase by 176,000 jobs or 0.12%, with 28,000 full-time jobs in the automotive industry alone.

U.S. exports to Canada would increase by $19.1 billion (5.9%) and to Mexico by $14.2 billion (6.7%). U.S. imports from Canada would increase by $19.1 billion (4.8%) and to Mexico by $12.4 billion (3.8%).

The issue of cross-border trucking was briefly discussed in the analysis. One provision in the USMCA essentially restricts Mexican carriers to the border commercial zones.

Industry stakeholders in the U.S. argue that such restrictions on Mexican long-haul trucking services would result in the U.S. trucking industry being more competitive. Countering that, some critics say the restrictions “may invite retaliation by Mexico and thus undermine future U.S. negotiations to further liberalize cross-border services trade with Mexico,” according to the report.

USMCA will give the U.S. power regarding the supply of trucking services by Mexican firms within the United States. One provision allows the U.S. to restrict Mexican trucks in the event of “material harm” to U.S. trucking suppliers, operators and drivers. To date, only 35 Mexican carriers are authorized to provide long-haul services within the U.S. Some question the impact of this provision.

“Some industry representatives question the usefulness of including a provision to increase limits on the relatively small number of Mexican trucking firms in the United States,” the report states. “They indicate that doing so may, in fact, discourage further negotiations to open U.S. cross-border services trade with Mexico.” LL

Tyson Fisher

Tyson Fisher joined Land Line Magazine in March 2014. An award-winning journalist and tireless researcher, his news reports, features and blogs bring depth to our editorial content, backed with solid detail. Tyson is a lifelong Kansas Citian.