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Congress will soon vote on the U.S.-Mexico-Canada Agreement (USMCA) – a decision that would have a significant impact on the economic health of California’s farmers, manufacturers, and small businesses.
On a national scale, Canada and Mexico are by far the two largest U.S. export markets. In 2018, trade with the two countries reached nearly $1.4 trillion. Currently, trade with our North American neighbors supports 12 million American jobs.
But how much will USMCA’s passage impact California?
Trade with Canada and Mexico supports more than 1.4 million jobs based in California – a fact that is top for many California business owners and workers. Just last week, Vice President Mike Pence stopped in Lemoore, Calif. for a policy event hosted by America First Policies where he spoke about the benefits USMCA has for workers, businesses, and the economy.
The agreement is vital for California’s manufacturing sector, which plays a major role in the state’s economy. Nationwide, U.S. manufacturers export more American-made goods to Canada and Mexico than to the next 11 largest export markets combined.
The Golden State relies on trade with these two countries for economic growth. The total value of California exports sent to Canada and Mexico totaled $59.5 billion in 2018, according to the U.S. Census Bureau, Economic Indicators Division. The top export products included the following:
California’s top three exports to Canada
· Electric Machinery and Equipment
· Nuclear Reactors and Boilers Machinery
· Edible Fruit and Nuts
California’s top three exports to Mexico
· Electrical Machinery and Equipment
· Boilers and Electrical Appliances
· Vehicles and Parts
But manufacturing isn’t the only sector of California’s economy that relies on North American trade for revenue growth. California farmers and ranchers are particularly dependent on the Canadian and Mexican markets — and stand to benefit significantly from USMCA. On a two-day tour of Northern California, USDA Secretary Sonny Perdue answered local farmers’ questions and expressed support for “a level playing field” when it comes to farmers exporting goods in international markets.
Bob Amarell, a California nut farmer, stressed to Perdue the importance of trade to his business and to the farming industry as a whole.
“If we can’t get [USMCA] ratified, China, Japan and everyone else in the world is going to say, ‘If you can’t do business with your next door neighbors, how can you do business with us?,’” he said.
The uncertainty Amarell voiced is a concern for farmers nationwide given that Canada and Mexico account for nearly one-third of American agriculture exports.
Small businesses in California also have a stake in whether USMCA is implemented.
Canada and Mexico are the top two export destinations for small and medium-sized U.S. businesses, more than 120,000 of which sell their goods and services to our North American neighbors.
San Diego Mayor Kevin Faulconer emphasized his support for USMCA and touched on the overall importance of trade at the local and state levels to KPBS Public Media in October.
“Free trade is incredibly important to us in San Diego. That's a strength we use to compete with other regions around the world –– so we want to keep that going,” he said.
In addition to maintaining access to two vital markets, USMCA will establish the strongest, science-based sanitary and phytosanitary standards achieved in any trade agreement. It also provides transparency on measures impacting trade in biotechnology products.
The U.S. business and agriculture communities are rallying to make the case for USMCA approval. More than 400 companies and associations from every sector of the economy banded together to form the USMCA Coalition and urge Congress to pass the legislation.
The case for the agreement’s approval is strong and the voices supporting its passage are growing stronger. Join us as we urge Congress to approve USMCA as soon as possible.