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Congressman Adrian Smith

Representing the 3rd District of Nebraska

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Modernizing NAFTA

November 30, 2018
Column

On Friday, President Trump, along with Mexican President Peña Nieto and Canadian Prime Minster Trudeau, signed the United States-Mexico-Canada Agreement (USMCA) at the G20 Summit in Buenos Aires, Argentina. The USMCA is the culmination of more than a year of negotiations between our three countries in order to update and build upon the success of NAFTA. I look forward to playing an active role in the review process as a member of the Ways and Means Committee, which has jurisdiction over trade agreements. 

I have worked over the past two years to ensure the important benefits of a trilateral NAFTA agreement continue in the modernized version. I traveled to both Montreal and Mexico City to meet with my parliamentary counterparts and ensure the needs of Nebraska’s agricultural industry were being properly communicated. As I’ve said from the beginning when President Trump first talked of revising NAFTA, Canada and Mexico are Nebraska agriculture’s two best customers and any replacement should build on this success.

Much has changed in the nearly 25 years since NAFTA was signed and there are several areas in which improvements have been made. One example is Canada’s dairy market, which for too long has limited access to American dairy while unfairly shielding Canadian dairy producers from competition. Under the new agreement, Canada would eliminate both class six and seven dairy categories. The agreement also seeks to prevent non-NAFTA countries from abusing its privileges by importing through a third country to avoid tariffs. For example, in the auto industry, new rules of origin will require 75 percent or more of vehicle content be produced in North America.

Other areas which were badly in need of updating include intellectual property protections, guidelines for digital trade, and streamlined financial services language. In particular, the agreement enhances protections against the theft of trade secrets, which we all know is a major problem we face in dealing with other countries like China. It also seeks to mitigate disagreements with our neighbors over the storage and migration of data across borders having arisen with the advent of the digital age.

This is a complex agreement and, as I have said previously, I look forward to going through it in detail once formally submitted to the Congress. We should, however, recognize the significance of this achievement. Only a few months ago, we were concerned about maintaining any agreement at all, knowing a withdrawal from NAFTA would have dire consequences for all of North America.

Now is the time to address steel and aluminum tariffs levied against Canada and Mexico which have resulted in retaliation against our agricultural producers and other industries. USMCA should be seen as an important first step toward restoring and expanding market opportunities for our agricultural producers around the world. We must also capitalize on upcoming negotiations with Japan and work hard to resolve our trade dispute with China concerning its unfair trade practices.