January 28,2020

Grassley op-ed: USMCA paves the way for productivity and prosperity

Expanded markets in Mexico and Canada are good news in Iowa for farm and industrial manufacturing workers, dairy farmers and small-business owners

By Sen. Chuck Grassley
Skeptics of President Donald Trump’s bold way of negotiating trade ate a bit of crow this month.
That includes this Iowa senator.
I’m not a big fan of tariffs. So, when the president imposed tariffs as leverage in world trade talks, I was skeptical. And yet, here we are starting the fourth year of his presidency and President Trump has succeeded in securing two major trade agreements that are good for America and good for Iowa.
Two weeks ago, I joined Gov. Kim Reynolds and Sen. Joni Ernst at the White House for a signing ceremony with China, the world’s second-largest economy. After reciprocal tariff hikes largely put American farmers on the hook for retaliation, the Trump administration first cushioned financial harm to rural America with Market Facilitation Payments before closing the deal and sealing a big win for U.S. farmers and ranchers.
This phase one agreement commits China to purchase $32 billion worth of agricultural products over the next two years. This is also welcome news for Iowa farmers hard hit by natural disasters, including flooding that’s caused prevented planting, in addition to a five-year stretch of low commodity prices. It brings much-needed certainty for farmers and lenders as they make decisions for the coming season.
President Trump is taking another well-deserved victory lap at the White House to sign the new U.S.-Mexico-Canada (USMCA) agreement. The agreement updates and improves the North American Free Trade Agreement (NAFTA) enacted a quarter-century ago.
Canada and Mexico are Iowa’s two biggest customers and trade partners. The renegotiated trilateral trade pact keeps in place crucial duty-free access to these markets that have served as a bread and butter export market for Iowa, reaching $6.6 billion in 2018. For Iowa pork producers, it keeps intact the vital market in Mexico, the largest market for U.S. pork. It’s a big deal for the factory workers whose paychecks relied on $1.7 billion in machinery exports and the farmers and workers whose food products and commodities reached $2.4 billion with Canada and Mexico just in 2018 alone. The modernized USMCA means bigger and better paydays lie ahead.
As chairman of the Senate Finance Committee, which has primary jurisdiction over trade policy, I worked across the aisle with Sens. Ron Wyden and Sherrod Brown in the Senate and with Democratic leaders in the U.S. House of Representatives to get USMCA across the finish line. Unfortunately, partisanship threw unnecessary sand in the legislative gears for an entire year.
The overwhelming 89-10 bipartisan vote in the U.S. Senate reflects the outstanding work of the Trump administration’s trade team to negotiate a stronger and more modern trade agreement for the United States and our neighbors in North America. The endorsements by the U.S. Chamber of Commerce and the AFL-CIO also reflect the broad coalition and underscores why this is a good deal for Americans of all walks of life. By all accounts, the USMCA will drive the economy forward, grow wages and raise standards of living for American workers, families and consumers.
Here’s why. The USMCA paves the way to turn American productivity into even greater prosperity in the 21st century. When NAFTA took effect 26 years ago this month, the digital economy and commercialization of the internet didn’t yet exist. The new digital trade chapter in this agreement will allow the $1.3 trillion U.S. digital economy to keep growing and create even higher-paying jobs. What’s more, wages will grow in U.S. manufacturing, particularly in the auto industry. USMCA gives the green light to Iowa’s farm machinery and industrial manufacturers to keep producing and innovating to reach more markets.
For our farmers and workers all along the food supply chain, USMCA opens the barn door to unprecedented access for eggs and U.S. dairy products to Canada. This is particularly good news for our dairy farmers who have struggled to thrive in recent years.
For our small businesses, the USMCA cuts red tape to simplify the process to export products and services to our northern and southern neighbors.
USMCA and the phase one trade agreements with China and Japan put America on the right track. President Trump is following through on his campaign promises to renegotiate and strengthen our trade agreements and put America first.

That’s something we can all crow about here in Iowa.