Brady Speaks at Rice University on USMCA and the Freedom to Trade
Houston, TX — Today, the top Republican on the House Ways and Means Committee Kevin Brady (R-TX) spoke at Rice University’s Baker Institute for Public Policy to discuss the new United States-Mexico-Canada Agreement (USMCA) and the future of trade.
Remarks as prepared for delivery:
“Thank you, Director Payan, for the kind introduction and your work at the Center for the United States and Mexico.
“Director Djerejian, it’s good to see you again. Your longstanding, brilliant leadership of the Baker Institute is one of the many blessings Houston and policy makers throughout the world are grateful for, including me.
“To Dr. Gantz, who will be grilling me in a few moments, whose policy research and insights are important tools for trade leaders; President Leebron for your visionary leadership of Rice; and to Nathan Cook, who arranged this discussion, thank you so much for hosting the conversation on USMCA today.
“I credit my involvement in international trade in large part to the namesake of the Institute, Secretary James A. Baker.
“Shortly after being elected to Congress, I sought out the advice of President George H.W. Bush and Secretary Baker on which economic issues to focus on in Washington. As a chamber of commerce executive, my experience was in helping start new businesses, recruit industry, and creating a pro-growth business climate in the regions I served – and I wanted to know how best to further that at the national level.
“Secretary Baker advised me to focus on international trade and introduced me to Bob Zoellick, who would later become the U.S. Trade Representative under President George W. Bush. Because of the complexity of trade issues – economic, political, and historical challenges – I began seeking an opportunity to engage in a trade agreement from its very inception, from announcement through negotiating rounds, passage through Congress, entry into force and its implementation.
“It was in the White House dining room that Ambassador Zoellick invited me to play that role in Congress for what he described as a strategic, non-controversial trade agreement he was proposing with Central America. I jumped at the opportunity, little knowing it would consume years of my congressional life and become one of the most politically difficult agreements to pass since NAFTA itself.
“Ultimately, on the Ways and Means Committee I’ve engaged in passing 12 of the 14 free trade agreements America has in place today, Congressional approval of both China and Russia’s accession into the World Trade Organization, and two updates of the trade promotion authority that lays out the rules for the White House and Congress to follow in developing and considering future trade agreements.
“I believe in the freedom to trade.
“It is the greatest economic freedom we possess, and it lies at the heart of our free enterprise system.
“It’s crucial for the American people to understand that the term free trade, like free speech, doesn’t refer to its cost – but to the freedom to trade. It is about preserving and expanding our individual and collective freedom as Americans to buy, sell, and compete anywhere in the world with as little government interference as possible.
“To the entrepreneur toiling deep into the night working on their new breakthrough idea, this freedom ensures you have the opportunity to place that product or service on the market and make it available throughout the world.
“For American consumers – for families, for that single mom – the freedom to trade protects your ability to choose from the broadest range of products at a price that works for you.
“One of the reasons I love the freedom to trade is because it poses a key question: Who has the power?
“Who has the power to decide what products you can buy and at what price – is it Washington, special interests, unions? Or is it you, the consumer?
“Free trade ensures that it is the consumer that ultimately has the power to decide what to buy and at what price.
“I’m also convinced that as we live in a world that increasingly chafes at the establishment, the freedom to trade is the most anti-establishment power Americans enjoy.
“It guarantees that when a new product is designed, a better service unveiled, or a new breakthrough technology produced – that special interests can’t hold you back from selling it, buying it, or even disrupting an entire industry if you’ve delivered a product or service better than what exists today.
“As Thomas Jefferson wrote, ‘commerce with other nations is not only necessary and beneficial to all parties, it is a right and a duty.’
“The freedom to trade is a right in America, and we ought to keep that in the forefront as we work through the trade debates of our time. America – and Texas – is made for trade.
“But it’s even greater than that. The freedom to trade can lift individuals, communities, whole nations and the world out of poverty. Where freedom to trade flourishes, poverty is reduced.
“Over the past few decades, more than one billion people have been lifted out of poverty, due in large part to trade. Trade as a share of the world economy has nearly doubled to over 70 percent. Research confirms that where the freedom to trade takes root, higher incomes, more affordable products, economic growth, human rights, and environmental protections increase.
“That is why our subject today, the new United States-Mexico-Canada Agreement, is so vital.
“In October 1992, when President George H. W. Bush joined leaders from Mexico and Canada to initial the original North American Free Trade Agreement in San Antonio, in October of 1992, he described the agreement as a ‘turning point in the history of our three countries.’
‘”We are creating the largest, richest and most productive market in the entire world, a $6 trillion market of 360 million people that stretches 5,000 miles.’
“This agreement, he said, ‘is an achievement of three strong and proud nations. . . . and expresses our confidence in economic freedom and personal freedom, in our people’s energy and enterprise.’
“Over the next quarter of a century, NAFTA achieved many of its ambitious goals: quadrupling trade between the three nations, greater choices of affordable products, sales of more Made-In-America goods and services, more affordable energy to fuel growth, and integrated supply chains that allow our farmers, workers, and businesses in all three countries to compete more successfully here and around the world.
“NAFTA also strengthened Mexican democracy and human rights by helping make it a more stable and prosperous country. And key infrastructure investments improved the environment along the crucial U.S.-Mexico border.
“But the world doesn’t stand still. Today, there are over 280 trade agreements in place across the globe. Economies, technologies, and consumer demands continue to evolve.
“It was past time for NAFTA to be modernized, and that is precisely what the Trump Administration achieved in partnership with Canada and Mexico.
“The new USMCA retains many of the successful foundations of NAFTA, including zero tariffs on all U.S. goods exported to Mexico and nearly all products to Canada, including new openings for U.S. dairy, wine, and poultry.
“But it goes beyond those to: lock-in key Mexican reforms in energy and telecommunications; create a level playing field for financial services and investment; establish the best digital trade rules of any trade agreement in existence which will maintain America as a world leader in the digital economy; includes strong protections for intellectual property including tools to guard against counterfeiting and piracy; and requires modern, science-based food safety standards for agriculture and biotechnology.
“Modern 21st century trade agreements recognize that trade barriers exist beyond the borders. In USMCA, the three North American countries are voluntarily removing discriminatory regulations and technical barriers to trade while modernizing customs procedures to move legal trade across borders faster, affordably and more securely to all three countries.
“USMCA spurs U.S. innovation by shortening the time that American inventors need to wait for patents. This preserves valuable time and dollars in getting new products to market and preventing foreign competitors, especially in China, from getting a leg up.
“New rules will ensure central government state-owned enterprises don’t distort competition with private businesses, and that broader competition is enhanced by anti-trust investigations that are fair, transparent, and based on sound economic analysis.
“To their credit, President Trump and his U.S. Trade Representative Bob Lighthizer sought from the very beginning to build Democrat support for this agreement to buttress traditionally strong Republican support for trade in Congress. Bipartisan support for trade is crucial in the short and long-term for America.
“For that reason, the President included the strongest and most enforceable labor provisions of any American trade agreement in history. USMCA requires Mexico to create a true union system – including collective bargaining rights, secret and personal voting, the right to strike, and tools to protect Mexican union workers against violence.
“For labor Democrats, this is a dream agreement that embraces longstanding provisions they had never achieved to date under any administration – drawing support for USMCA from three former Obama cabinet officials and the former chair of the Democratic National Committee.
“Mexico has already passed an historic new law to implement these requirements. It is nothing short of transformational.
“Texas Congressman Henry Cuellar and I visited Mexico officials in August to assess their progress. Meeting with the foreign and labor secretaries and leading trade officials, it was clear that Mexico is committed to these historic labor reforms. They are seeking an economic future built on growth and productivity rather than low wages – a goal of the original NAFTA that has yet to be realized.
“This is significant because American workers have for so long been forced to compete against artificially low Mexican wages.
“In addition, USMCA will generate over $34 billion in new auto manufacturing investment in the U.S. and create 76,000 American auto-sector jobs over the next five years by requiring greater U.S. and North American content – and higher average wages of Mexican auto workers – for vehicles imported into the U.S.
“America must embrace and support these remarkable changes by passing USMCA as soon as possible.
“Every day USMCA is stalled in Congress, American workers, families, and our economy are missing out. This new agreement is estimated to add over 176,000 new jobs, fueling $68 billion in economic growth into our nation’s economy.
“President Trump has been right in insisting that we must level the global playing field for American companies. He is serious about implementing policies that will build on the growing successes we have seen from our tax and regulatory reforms by opening up new markets for us to sell more American products.
“For Texas, no state stands to gain more when this agreement is approved. And no state stands to lose more if it fails. The Lone Star State exports over $137 billion to Mexico and Canada each year, which support over 900,000 Texas workers.
“Agriculture exports to our closest neighbors accounts for nearly $4 billion a year, supporting 23,000 Texas ag jobs. And U.S. crude exports have surged since the export ban was lifted four years ago. In 2017 alone, Texas exported $25 billion worth of petroleum, coal, oil, and natural gas products to our NAFTA partners – and we’re just getting going.
“Given the importance to Texas of growing trade with Mexico and Canada – and to build even stronger economic bridges with our closest neighbors – there is no sound reason for any of our state’s 38 representatives and senators in Congress to oppose USMCA.
“Mexico has approved the agreement. Canada is ready and prepared to ratify. It’s time for America to act. The U.S. will be losing out on more jobs, more customers for Made-in-America goods and a stronger economy unless the U.S. House of Representatives takes up and approves USMCA this fall.
“The President is eager to send USMCA to Congress, and is only awaiting a green light from House Speaker Nancy Pelosi.
“I believe there is growing bipartisan support for the agreement, and Speaker Pelosi, to her credit, has established working groups among Democrats in the House to work with Ambassador Lighthizer to fine-tune the agreement to address remaining Democratic priorities.
“Today, due to pro-growth tax reform and balanced regulation, America has recaptured our ranking as number one most competitive economy in the world. To reach our full economic potential, we will need more customers – which USMCA can provide.
“As President Trump stated as the agreement was announced, ‘this will bring all three Great Nations together in competition with the rest of the world.’
“In the end, USMCA will not be a Republican win or a Democratic win, but a win for the American people and a stronger, more beneficial alliance with our North American trading partners.