Opinion: Michigan workers will benefit from North American trade deal
Throughout Metro Detroit, job providers of all sizes rely on trade with foreign markets to support and grow their businesses.
The most recent data shows businesses in Macomb County exported more than $7 billion worth of goods in 2017 — more than many states, according to the office of the U.S. Trade Representative. The Detroit Metro region, which includes Wayne, Macomb and Oakland counties, accounted for more than $43 billion in exports. As you might guess, trade with our two neighboring countries accounts for a significant portion of that.
Since the North American Free Trade Agreement (NAFTA) went into effect in 1994, U.S. trade with Canada and Mexico has nearly quadrupled to $1.3 trillion, and the two countries buy more than one-third of U.S. merchandise exports.
But 25 years have gone by since NAFTA was established. Other countries have figured out how to get around it. They’re undercutting Michigan companies and American workers are losing out. The outdated agreement no longer works in the best interest of Michigan workers and it needs to be replaced.
The new U.S.-Mexico-Canada trade agreement President Trump negotiated to replace NAFTA will help level the playing field for American autoworkers by improving labor standards in Mexico and increasing the threshold for the use of domestic parts and assembly. If the new rules are adopted, vehicles must be built with at least 75 percent of parts made in North America in order to qualify for zero tariffs. This is up from 62.5 percent under NAFTA. Also, 40-45 percent of an automobile will have to be made by workers earning at least $16 an hour.
The automotive and manufacturing industries continue to be a cornerstone of our local economy. We have four vehicle production plants in Sterling Heights, with 76,000 automotive technicians and skilled trades’ professionals who live, work and raise their families in local communities. They deserve a fair shake. The Detroit Metro region has lost too many good-paying factory jobs, and it’s time we stop allowing people to take advantage of us.
NAFTA also no longer works because many of the goods, services and exchanges through which trade is facilitated did not exist when the agreement was drafted. This applies mostly to the area of intellectual property (IP).
A tremendous amount of trade with our neighboring countries involves goods and services that are IP-intensive. These products involve patent, trademark and copyright protections, such as the new technology in cars and computers and agricultural biotechnology. The modernized trade agreement offers stronger protections for the IP rights that are critical to driving innovation, creating economic growth and supporting jobs in Michigan.
The updated agreement will benefit Michigan’s agricultural industry as well by providing more certainty and stability. It eliminates Canada’s unfair milk pricing program, giving 1,500 family dairy farms here in Michigan additional access to the Canadian market. It also helps poultry farmers by expanding opportunities for chicken and egg exports.
Job providers and working families all across our state will benefit greatly from a modernized trade agreement with our most important trading partners. It’s time for Congress to put aside politics and sign this deal so all of these benefits can finally kick in.
State Rep. Diana Farrington, R-Utica, represents Michigan's 30th District. She recently sponsored a resolution urging Michigan’s congressional delegation to approve the U.S.-Mexico-Canada Trade Agreement.