By BRADLEY BYRNE, Congressman
Under the conservative leadership of President Donald Trump and Gov. Kay Ivey, Alabama’s economy is really humming along. Our unemployment rate is at the lowest point in our state’s history, and it seems we are learning about new businesses and expansions in our state on an almost weekly basis.
Thanks to passage of the new United States-Mexico-Canada trade agreement (USMCA), I am confident our state’s economy will continue to boom. The USMCA deal will unlock new opportunities for businesses in our state while protecting our Alabama workers.
NAFTA, the predecessor to the USMCA, had some pretty negative effects on our state. I’ve traveled to many Alabama towns over the last few years and heard horror stories about how NAFTA took jobs out of the United States and sent them to other countries. That’s why I was thrilled to support President Trump as he set out to renegotiate NAFTA.
Members of the national news media and political pundits said it was impossible to renegotiate NAFTA and couldn’t be done. But, like so many other things, President Trump proved his critics wrong. In the end, he negotiated a very strong deal that directly benefits Alabama. I proudly voted in support of the new agreement when it passed the House.
The USMCA will be positive for every state in the country, but as United States Trade Representative Robert Lighthizer recently joked with me, the USMCA “is going to weigh Alabama down with jobs.” This is because Alabama is uniquely positioned to benefit from the USMCA due to the nature of our economy, the Port of Mobile, and our strong trading relationship with both Mexico and Canada. In fact, Canada and Mexico are two of Alabama’s biggest trading partners, as they buy 35% of the goods we export.
There are so many things in this agreement that are important to our state. Agriculture is Alabama’s number one industry and this agreement will remove unfair trade barriers to Canada in dairy, poultry, and eggs. The agreement provides new and important protections for intellectual property, which will be particularly critical as Alabama continues its amazing growth in the high-tech space. The agreement also helps small businesses, the backbone of Alabama’s economy, to be able to more easily sell their goods to Mexico and Canada.
The automotive chapter of the agreement will particularly benefit our Alabama workers. Alabama has been fortunate to have experienced rapid growth in the auto sector over the last 25 years. In 1993, Mercedes opened its first U.S. assembly plant in North America right here in Alabama. Since then, Hyundai, Honda, Toyota, Autocar, and New Flyer have all opened manufacturing facilities in the state. Based upon this strong presence, approximately 150 auto suppliers now have a presence right here in Alabama.
Under the rules for USMCA, 75% of the parts in a vehicle must now be manufactured in North America, up from 62.5%. Additionally, now 40% of a vehicle’s contents must be made by workers earning at least $16 an hour, a wage Mexico can’t meet. The effect of these two provisions will mean that considerably more of each U.S. manufactured vehicle will have to be made in the United States. Based upon our already existing supplier and manufacturing base, perhaps no state is better set to get these jobs than Alabama.
All told, the USMCA deal is expected to create 176,000 new American jobs and raise our gross domestic product (GDP) by $68.2 billion. The agreement does exactly what the President promised in his campaign: it raises the amount of made in America products that Mexico and Canada will buy with exports to Canada increasing by an estimated $19 billion and exports increasing to Mexico by $14.2 billion.
Finally, unlike NAFTA, the USMCA has strong enforcement procedures to make sure that the agreement is lived up to by Mexico, particularly with respect to their labor practices. It is important that other countries not take advantage of the United States to give them a competitive advantage over our workers.
Free trade is a hallmark of the American story, but free trade only works if it is fair. I was proud to support President Trump as he worked to negotiate a better deal for our country, our state, and our workers, and I was proud to vote for it on the floor of the House. I have no doubt Alabama’s economy will grow even stronger thanks to this new trade agreement with Canada and Mexico.
Bradley Byrne is a Republican representing Alabama’s First Congressional District in the U.S. House of Representatives. He is currently running for the U.S. Senate seat held by Senator Doug Jones (D-Ala.).