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A. Scott Anderson: Utahns should care about the USMCA trade agreement

President Donald Trump, Canada's Prime Minister Justin Trudeau, right, and Mexico's President Enrique Pena Neto, left, participate in the USMCA signing ceremony, Friday, Nov. 30, 2018 in Buenos Aires, Argentina.
President Donald Trump, Canada's Prime Minister Justin Trudeau, right, and Mexico's President Enrique Pena Neto, left, participate in the USMCA signing ceremony, Friday, Nov. 30, 2018 in Buenos Aires, Argentina.
Pablo Martinez Monsivais, AP

International trade is one of the most important factors driving Utah’s economic success. Free trade is critical to Utah’s future and to the nation’s economy.

That’s why it is important for the U.S. Congress to ratify the United States-Mexico-Canada Agreement, or USMCA, as soon as possible. I hope all five members of Utah’s congressional delegation will fight for the passage of USMCA and tell congressional leaders they want the legislation to move forward quickly.

The average Utah citizen may not think that international trade affects them personally, but it certainly does. One does not have to own a business that directly imports or exports to feel the positive effects of strong global trade, or the negative effects of high tariffs and protectionism. Virtually every Utahn benefits from international trade as the effects ripple through the economy.

According to World Trade Center Utah, some 3,500 Utah companies directly engage in exporting. Thousands of businesses also use imported products. Some 95,000 Utah jobs are supported by international business.

Utah has strong international ties, and it’s valuable to remember that 95 percent of the world’s consumers live outside of the United States. Some 92 percent of the world’s economic growth occurs outside the United States, and 80 percent of the world’s purchasing power is outside of the United States.

It would be foolish for the United States to turn inward and become overly protectionist, hurting our state and the nation’s economies.

It is a credit to the Trump administration that negotiations have produced the United States-Mexico-Canada Agreement. It is meant to replace the North American Free Trade Agreement, which went into effect some 25 years ago and needed updating.

No trade agreement is perfect, and Democrats say USMCA needs stronger labor provisions, while some Republicans want tariffs on steel and aluminum eliminated in concert with USMCA ratification. Those concerns should not derail USMCA ratification.

Miles Hansen, president and CEO of World Trade Center Utah, notes that the U.S. conducts 80 percent more trade with Canada and Mexico than with China — and China is a very important trading partner. Congressional failure to ratify USMCA would damage U.S. credibility with our trading partners, including China and the European Union. “It would send a terrible signal if we don’t follow through and finish it,” he said.

As the 2020 election nears, and partisan divisions harden, it will more difficult for Congress to accomplish anything. That’s why it needs to be ratified now.

USMCA ratification is especially important for Utah’s agriculture industry. Nearly 20 percent of Utah’s agriculture exports, including milk, alfalfa hay, beef, fruit and other products, go to Mexico and Canada. Another 15 percent goes to China.

Ron Gibson, president of the Utah Farm Bureau Federation and a sixth generation Ogden area dairy farmer, recently wrote that Utah farmers today face the toughest times they’ve ever seen. Shutting down foreign markets could mean bankruptcy for many farmers. He noted that Utah agriculture represents about 79,000 jobs, $3.5 billion in compensation and $21 billion in total economic output. Farmers are willing to endure difficult times and compete, but they need export opportunities to be successful.

Ratification of USMCA would bode well for negotiations currently underway for a new trade agreement with China. Both sides say that good progress is being made. Stronger protections for U.S. intellectual property, a reduction in the trade deficit and better oversight of technology transfers to China would be good news for the United States.

I’m hopeful that an excellent agreement with China, and eventually with the European Union, will be developed. But first the USMCA needs to be ratified by Congress. I hope Utah’s delegation will help make it happen.