Congressman Ted Budd Exclusive Op-Ed: NC economy was running strong, but the USMCA could make it even better for workers

(Rep. Ted Budd is a member of the U.S. House representing North Carolina’s 13th district. He serves on the Financial Services Committee.)

North Carolina’s economy has had a fantastic run over the past three years. Unemployment is at its lowest point in 20 years, and the future never looked brighter for hard working men and women across our state.

Luckily, the Trump administration has lined up the perfect shot in the arm that will bring even more jobs and secure our state’s industrial future for years to come.

The U.S.-Mexico-Canada Agreement (USMCA) is the product of months of careful negotiation with our partners in Mexico and Canada. It lingered in legislative limbo for many additional months, however, while the Democrats pursued their politically motivated impeachment crusade against President Trump.

Last May, Nancy Pelosi declared her caucus could “walk and chew gum at the same time.” Yet, it took her seven more months to get the USMCA through the House of Representatives despite broad bipartisan support and the endorsement of the AFL-CIO. In fact, Pelosi only allowed a vote on the bipartisan legislation when she started taking heat for letting impeachment get in the way of governing.

Never mind all that. Just be thankful we’ve got the USMCA now. It’s the most significant trade deal in decades.

North Carolina’s manufacturing base was badly treated by previous “free trade” deals aimed at opening America’s markets to massive amounts of cheap foreign goods. That was great for corporate bottom lines, but it wasn’t so good for American workers who were forced to compete with foreign workers willing to endure horrendous conditions for abysmal pay.

The North American Free Trade Agreement (NAFTA), which the USMCA will replace, came into force in 1994. There were certainly positives. The removal of tariffs on cars and trucks produced with mostly North American parts, for example, allowed the creation of an integrated continental supply chain. But there was a lack of protections for American workers who suddenly found themselves competing with lower-paid Mexican workers.

After 1994, North Carolina experienced a modest drop in manufacturing jobs. An even harsher blow to American workers, however, came with the December 2000 entry of China — a country with a long history of illegal and abusive trade practices and a human rights record among the worst in human history — into the World Trade Organization. Over the next decade, North Carolina lost more than 40 percent of its manufacturing jobs.

The USMCA represents a decisive turn away from the free trade fundamentalism that got us into this mess. It imposes a $16 per hour minimum wage on Mexican auto factories producing for the U.S. market, and extends crucial labor rights to Mexican workers, reducing the incentive for companies to simply seek out the poorest workers on the North American continent.

Perhaps even more importantly, the USMCA creates a united North American front against the Chinese Communist Party’s state-owned enterprise model. Within the North American free trade zone, there are significant new restrictions on state-supported firms and prohibitions on insulating them from market forces. In turn, the USMCA creates a mechanism by which any of the three parties can opt out of the deal if any of the other parties begins to cave to the lure of opening their market to more cheap Chinese goods.

North Carolina has long courted automakers, hoping to entice them to build the sort of large factories that our neighbors have. With the implementation of the USMCA, our state will become a more attractive location for such factories than ever before. Canada and Mexico are our largest trading partners by far, accounting for almost one-third of North Carolina’s total exports. Expanding access to Canada’s markets and reclaiming jobs from Mexico will make our booming economy even stronger.

Our state’s unemployment rate is at a historic low of 3.7 percent, but nobody would object if it were to fall even lower. More job openings means more power for workers — and the higher wages, better benefits, and improved working conditions that come with it. That’s the kind of economy President Trump wants for North Carolina, and with the USMCA, he’s turning that vision into a reality.

(Rep. Ted Budd is a member of the U.S. House representing North Carolina’s 13th district. He serves on the Financial Services Committee.)

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