Opinion: USMCA will boost Michigan economy and jobs
For Michigan manufacturers, access to rules-based, tariff-free global trade is imperative to the economic prosperity and the livelihoods of more than 634,600 workers across the state. As manufacturing is one of our top industry employers, ensuring the ability for manufacturers to sell more of what they make to more consumers around the world is paramount.
It’s no secret that exports to North America are important, yet it may not be known just how much. According to the National Association of Manufacturers, last year Canada and Mexico purchased $34 billion in manufactured goods from our state, while the rest of the world purchased $21 billion. Put simply, our bordering nations buy more manufactured products from our state than the rest of the world combined.
Moreover, while Canada and Mexico represent less than 4% of the global economy, they are major purchasers of Michigan goods, supporting more than 117,000 manufacturing jobs — jobs that pay on average approximately $78,000 compared to the average salary of nearly $47,000 for workers across all private non-farm industries.
Over the past three years, 480,000 manufacturing jobs were created across America, including 26,000 in Michigan. And while we are experiencing a time of economic growth and opportunity, it’s important not to lose sight of what is at stake.
Serving the interests of manufacturers through the Michigan Manufacturers Association for over 25 years, I have seen the positive impact of free trade on our state’s economy, and so I fear what could happen without it. Without a modern trade deal with tariff-free trade across North America, the manufacturing industry would be thrown into chaos. Michigan’s manufactured exports to Canada and Mexico could face a minimum of $1.1 billion to $5.2 billion in extra taxes — enough to devastate any business.
I remain hopeful that our lawmakers will see the economic opportunities and the stricter provisions included in the United States-Mexico-Canada Agreement (USMCA) that previous trade agreements have lacked. The USMCA will strengthen and modernize rules to spur economic prosperity, increase access to Canada and Mexico, and finally create an even playing field for U.S. manufacturers. It will also impose stricter labor and intellectual property safeguards, from trademarks and copyright standards to trade secrets and patent protections, all of which are essential to U.S. and Michigan’s innovative manufacturing industries.
Just last month, Mexico ratified their end of the agreement, and fortunately for us, the economic and employment forecast for the USMCA remains bright. If ratified, data from the U.S. International Trade Commission shows that the USMCA would create 176,000 jobs and have a positive impact on U.S. trade, both with USMCA partners and with the rest of the world. Notably, U.S. exports to Canada and Mexico would increase by $19.1 billion and $14.2 billion, respectively, and manufacturing would experience the most substantial gains in output, exports wages and employment.
Considering that 95% of the world lives outside the U.S., it’s essential that Congress ratifies the rule-based, tariff-free trade agreement on the table. Free trade is the gateway for American workers, manufacturers, and Michiganders to economic opportunity, ingenuity, and the American dream.
Chuck Hadden is the president and CEO of the Michigan Manufacturers Association.