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W&M Looks to Build on NAFTA’s Success, Modernize Agreement for 21st Century Workers and Job Creators

July 18, 2017

Today, the Ways and Means Trade Subcommittee, chaired by Rep. Dave Reichert (R-WA), held a two-panel hearing with job creators from across the country on how to modernize the North American Free Trade Agreement (NAFTA) for the 21st century. The hearing comes just one day after the Trump Administration released its negotiating objectives for updating and enhancing NAFTA to ensure the agreement continues to benefit America’s manufacturers, services providers, farmers, workers, and consumers.

As Chairman Reichert said at the start of the hearing:

“Since its entry into force in 1994, the North American Free Trade Agreement, or NAFTA, has transformed the U.S. and North American economy. It has reduced barriers to our exports and allowed American businesses to sell their goods and services more freely and competitively to markets around the world … Despite its success, NAFTA was negotiated more than two decades ago, when the economic landscape looked very different. In 1994, the digital economy was in its infancy, Mexico had yet to undertake significant legal and regulatory reforms, and the North American supply chain had not yet fully developed. Today’s challenges require new rules, not only to reduce tariffs on our exports but to remove non-tariff barriers as well.”

As the Ways and Means Committee works with the Trump Administration to bring NAFTA into the 21st century, witnesses explained how the agreement has successfully opened up new markets to sell their exports, expand their business operations, and create new jobs here at home.

Thomas Linebarger – CEO of global manufacturer Cummins, Inc. – said: “NAFTA and our other free trade agreements have allowed us to do this and over the past decade we have added thousands of new, quality American jobs in cities like Minneapolis, MN, and Nashville, TN, and more rural locations like Whitakers, NC, Jamestown, NY, and Seymour, IN where we make our products … To me it is simple – when we can trade, we add jobs and invest in our American communities.”

Dennis Arriola – a leader at Sempra Energy, which employs over 16,000 people globally – shared: NAFTA has been a big win for the U.S. energy sector. It has helped to create a robust and integrated North American energy market that supports U.S. jobs and strengthens our energy security.”

Jason Perdue – an agriculture producer from York, Nebraska and President of his local Farm Bureau – said: Existing trade agreements have proven successful in reducing tariffs and tearing down non-tariff trade barriers that hinder U.S. farmers’ and ranchers’ competitiveness and prevent us from taking advantage of consumer demand for high-quality U.S. food and agricultural products throughout the world.”

Patrick Ottensmeyer – President and CEO of a Kansas-based railroad company – said: “International trade accounted for $26.4 billion of freight-rail revenue and 511 million tons of rail traffic in 2014. During the same period, approximately 50,000 rail jobs, which contributed over $5.5 billion in annual wages and benefits to the U.S. economy, depended directly on international trade.”

Christine Bliss – President of the Coalition of Services Industries, a group representing America’s services sector – said: “In total, U.S. trade with both Canada and Mexico in services exports alone amounts to $88 billion as of 2015. This directly supports 587,000 American jobs, which are well paying jobs, too.”

Witnesses all agreed despite NAFTA’s myriad benefits, the agreement does not fully reflect today’s economic realities and must be updated to ensure job creators, workers, and consumers can thrive in the 21st century.

Mr. Linebarger said: “In a digital age, we think a modernized NAFTA should include provisions that enable cross-border data flows for all types of data.”

Mr. Perdue remarked: “NAFTA has been good to agriculture and we see NAFTA modernization as a template for market access and rules for future negotiations and to improve agriculture trade with Japan and other Asia-Pacific countries in the future.”

Stan Ryan – President and CEO of a Washington state dairy company, Darigold, Inc. – said: “An agreement that has done this much good and that supports tens of thousands of jobs in the dairy sector alone must be preserved. That is why we believe we must ensure that no new trade restrictions arise through the NAFTA modernization discussions.”

Althea Erickson – a representative from global, online retailer, Etsy – discussed: “We urge negotiators to create a far smaller, simpler set of harmonized tariff codes for low-value goods, and make information about all import/export rules easy to access for example, through an open API.”

Ms. Bliss said: “NAFTA really presents an opportunity to create a real template and a very high-standard set of disciplines with respect to e-commerce and digital trade.”

Mr. Arriola discussed the importance of a strong investor-state dispute settlement mechanism: “ISDS is not theoretical, it’s not academic, it’s real … American companies need to be treated fairly and have access to a tribunal that will think fairly.”

Chairman Reichert discussed the need to ensure that an updated NAFTA lays the foundation for the U.S. to negotiate strong, enforceable trade agreements around the world:

“It is important that we get this right. A modernized NAFTA agreement will serve as a template for future agreements with our trading partners – particularly in the Asia-Pacific region, where our withdrawal from TPP has left an urgent void … When North America wins, America wins.”

CLICK HERE to learn more about today’s hearing.

CLICK HERE to read Ways and Means Chairman Kevin Brady’s (R-TX) and Chairman Reichert’s statements on the Trump Administration’s NAFTA negotiating objectives.