Groups representing US apparel and footwear brands and retailers have welcomed the Senate’s passage of the US-Mexico-Canada Agreement (USMCA), in a move that means the next step is for the bill to go back to President Trump to be signed into law.
The USMCA – which will update and replace the 25-year-old North American Free Trade Agreement (NAFTA) – was approved by the US Senate in a vote of 89-10 yesterday (16 January). It was passed earlier this month by the Senate Finance Committee in a 25-3 vote and by the House of Representatives last month in a bipartisan vote.
A statement from the White House said the trade agreement will replace the “job-killing, huge failure NAFTA,” rebalance trade between the US, Mexico, and Canada, and will lead to significant economic and job growth in the United States.
United States Trade Representative Robert Lighthizer, added: “Now that USMCA has passed the Congress of the United States with overwhelming, bipartisan majorities in both chambers, a new chapter in US trade policy has begun.
“The USMCA is the first trade agreement that will result in more manufacturing jobs, not fewer,” he said. “It is the first agreement that contains strong, enforceable labour and environmental standards that will help to level the playing field for American workers. It is the first trade agreement that embraces the promise of the digital economy and enhances America’s competitive advantage in technology and innovation. It is the first agreement with strong, enforceable disciplines against unfair, market distorting subsidies and currency manipulation. And it is the first trade agreement that contains a ‘sunset’ provision that will give future administrations leverage to ensure that, unlike the disaster that was NAFTA, USMCA will never become outdated and out of balance. USMCA is now the new gold standard against which all future trade agreements will be judged.”
The USMCA makes a number of updates and modifications to NAFTA, and will offer qualifying textiles and apparel, travel goods and footwear originating from the USMCA region duty-free access to the US and Canadian markets.
It also includes new provisions on textiles that incentivise greater North American production, strengthen customs enforcement, and facilitate broader consultation and cooperation among the three parties.
President Trump said he plans to sign the bill during the week of 20 January, according to international trade law firm Sandler, Travis & Rosenberg (ST&R).
However, as Canada has yet to ratify the USMCA and Mexico must still approve recent revisions made by the US, the agreement is not likely to take effect until mid-2020 at the earliest.
The American Apparel & Footwear Association (AAFA) is urging President Trump to sign the bill into law and implement the agreement quickly.
“Trade agreements have often been approved along sharp partisan lines. The USMCA was passed with a strong bipartisan majority in addition to being broadly welcomed by the business community and other stakeholders. Hopefully this is the new normal for trade policy going forward,” said president and CEO Steve Lamar.
“Once seamlessly implemented, this agreement will be a win for the textile, apparel, and footwear manufacturing and retail industries and the hundreds of thousands of American workers who rely on a vibrant North American trade partnership.
“With this in mind, we encourage the President to quickly sign this agreement, our trading partners to take the steps they need to implement the agreement, and all three countries to quickly enable it to enter into force.”
Meanwhile, Matthew Shay, president and CEO of the National Retail Federation (NRF), said the updated agreement will modernise trade among the US’s closest trading partners, “will support the millions of US jobs that depend on free trade with Canada and Mexico and will ensure the continued availability of affordable everyday necessities for American families.”
Kim Glas, CEO of the National Council of Textile Organizations (NCTO), expects the trade deal to “significantly bolster” US textile exports to the Western Hemisphere, particularly to Mexico.
“USMCA is a win for the textile industry. The improvements it makes to NAFTA will only serve to generate more business for domestic producers and create more jobs and investment in the US.”