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Rep. Vicky Hartzler: Pass USMCA to boost American automakers

September 16, 2019
In The News

The United States-Mexico-Canada Agreement is a great win for hardworking Americans and will play a critical role in the revitalization of our automobile industry. The agreement modernizes the existing continental relationship among our most important trading partners, allowing American businesses to better compete in the modern global economy.

Provisions in the agreement jump-start new investments in the auto industry, create new well-paying jobs here at home, and protect hardworking Americans from being undercut by cheap labor abroad.

My home state of Missouri houses one of Ford's assembly plants, building the company’s most profitable model, the F-150 line. Many of our communities depend on a robust auto industry, and the passage of the USMCA will help create just that.

According to the U.S. Trade Representative’s office, the implementation of the USMCA will spur new, massive investments in the auto manufacturing sector worth approximately $34 billion over the next five years.

New investments worth nearly $23 million will go into U.S. auto part purchases and promoting automotive research and development so that America remains a competitive player in the global automotive industry. More investment will also be directed towards the research and creation of cleaner, energy-saving automobiles and new automotive technologies. The new provisions will also spur more investment into the production of primary goods flowing into the auto industry, encouraging bigger purchases of U.S.-made steel and aluminum.

These investments alone will create 76,000 new well-paying jobs right here in America, targeting communities like the auto industries housed in Missouri.

Under the “Rules of Origin” provision, the USMCA will require that 75% of all automobile and light truck components that take advantage of the tariff-free provisions must be produced in North America. This provision already represents a drastic improvement from the current North American Free Trade Agreement, which only requires less than two-third of the components be made in North America.

As a safeguard to protect American workers from cheaper labor costs in Mexico, the agreement also requires that up to 45% of all automobile and light truck components be made by workers earning a base wage of at least $16 per hour. Missouri’s median hourly wage for auto manufacturers is already above $16, meaning that the implementation of the USMCA will put Missouri in a great position to continue supplying the world with dependable auto parts.

The agreement also includes provisions to modernize and streamline the certification mechanisms to ensure compliance. These new provisions will drastically reduce the bureaucratic red tape on American automakers in comparison to the existing provisions under NAFTA.

It has become clear over the last decade that NAFTA’s rules over automobile manufacturing were outdated and were hurting the American auto industry. Under the new USMCA, we are creating a freer, fairer, global economic environment for American-made automobiles to thrive. The USMCA is the right deal for Missouri and the right deal for America. I hope Congressional Democrats will join with my Republican colleagues to pass this agreement.

 

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