January 09, 2020

Cardin Floor Statement in Support of the United States Mexico Canada Agreement

“I support the USMCA because it will help raise living standards for Marylanders, cut red tape for small business, and unite us with our allies. The provisions of the USMCA protect the environment, help labor organizing efforts, fight for good governance and against corruption, and is enforceable.”

Watch Senator Cardin's remarks above and at this link.

"Shortly, we will be considering the United States Mexico Canadian Agreement, the USMCA. It updates and replaces the North American Free Trade Agreement, NAFTA. I support the USMCA and supported it earlier this week where it passed the Senate Finance Committee on a strong 25 to 3 vote. This strong vote was possible because of the hard work of Democrats in the House and Senate to make this agreement the strongest fully enforceable, pro-environment, pro-labor trade agreement the United States has ever entered into. 

"First, let me talk about why I think trade is important. I would point out to my colleagues that the maiden speech that I gave in the House of Representatives when I was first elected was on trade and the importance of trade agreement. I recognized how important the Port of Baltimore was to our economy and how important free trade and trade was to the Port of Baltimore. So clearly, trade agreements are critically important to the people of Maryland and it is important to the people of this country.

"International trade can lead to better economic outcomes, leveling the playing field for American businesses to ensuring our trading partners have adequate labor standards to make competition fair, trade can be the catalyst for these outcomes.

"Trade can raise the standard of living for the citizens in this country.

"Tariffs can disproportionately harm lower-income Americans. If the cost of things like milk, soap, or school supplies goes up because of higher tariffs, it doesn’t mean these families will stop buying these essentials – it means that they will have less to spend on the other essentials they depend on to keep their families safe and healthy, like clothes and medicine.

"Trade agreements allow us to ensure a zero- or low-tariff price for these items on which Americans depend, which raises the standard of living on all -- for all of us.

"Trade is important to US foreign policy. The world can be better, safer, and a fairer place when we are working with our allies. Trade agreements ensure the rest of the world starts to act a little bit more as we do with our values.

"This Administration’s harmful, non-strategic trade policy has strained our relationship with our allies, including Canada and Mexico. I think it has been misguided and damaging to the future of our country – but this agreement has the potential to begin a healing process with our North American neighbors, Canada and Mexico.

"As we move forward with trade agreements, it’s important that our values are represented in those agreements, that we strengthen American values. I support good governance and protecting workers and our environment. I am pleased that they are included in such agreements.

"For more than 25 years since the enactment of NAFTA, our economy has changed dramatically.

"From the proliferation of the internet, which has changed how businesses can easily be connected to the rest of the world, to how consumers shop, compare prices, and buy goods and services from all around the world, it is clear that NAFTA is a trade agreement that didn’t foresee these changes with our two largest trading partners. In addition, over time, we identified weaknesses in NAFTA and other free trade agreements that needed to be addressed.

"All of that is to say that NAFTA is overdue for an update.

"For the past two and a half years, the Administration, Congressional leaders, and our trading partners have been engaged in a process to update NAFTA to be a trade agreement for the 21st Century. In late 2018, an agreement was reached between the United States, Canada, and Mexico.

"Importantly, reaching this agreement alleviated the threat of this Administration to unilaterally withdraw from NAFTA.

"The agreement reached in 2018 was in my view incomplete and largely just continued the existing NAFTA, but it did have some provisions important to me and my constituents in the state of Maryland.

"Maryland is home to a thriving poultry industry. The agreement includes new market access to Canada for U.S. poultry. Maryland farms produced $1 billion dollars’ worth of chickens in 2017, surpassing that milestone for the first time. Our poultry industry production grew 12 percent from 2016 to 2017. The growth in value came even as the amount of chickens produced on the Eastern Shore declined by about 10,000 pounds, to about 1.84 million pounds. Maryland is the nation’s 9th largest producer of broiler chickens. This additional market access is good for Maryland’s poultry industry because it means more poultry produced in Maryland will make its way to Canada and Mexico, creating jobs and supporting the economy here locally.

"The agreement also included a few provisions that are very important for small businesses. Most important to many small businesses is a provision which raises the level of the so-called “de minimis” customs and tariff treatment of goods. The de minimis system is important to small businesses - for example, small sellers who list their goods on eBay, or Amazon and frequently ship to consumers not in the United States. Under the de minimis system, if a shipment under the de minimis level crosses a border, it enjoys an expedited custom and lower tariff treatment than larger shipments would. Under this agreement, the U.S. agreed to increase its customs de minimis levels to $800 for exports that Mexico and Canada, and Mexico and Canada have made favorable changes to their systems.

"As Ranking Member of the Small Business & Entrepreneurship Committee, this was a welcome change, to ensure small businesses aren’t bogged down by unnecessary red tape. The agreement’s small business chapter also includes support for small businesses to promote cross-border cooperation, tools for small businesses to identify potential opportunities and increase competitiveness, and public-sharing tools to promote access to capital. These are important issues to highlight for small businesses. Finally, the initial agreement included a landmark achievement for the first time in U.S. trade history: it included a full chapter on anti-corruption.

"During 2015, when the Senate was considering so-called fast track “Trade Promotional Authority”, under which the USMCA is now being considered, I authored a principal negotiating objective in the Trade Promotional Authority legislation that requires any trade agreement the USTR negotiates to emphasize good governance, human rights, and the rule of law. 

"These are our values and these values need to be reflected in our trade agreement. It’s an important step towards a level playing field for trade with the United States, for our farmers, our producers, and our manufacturers. We know our system is a fair system, but in so many other countries that we deal with that is not the case. This Principal Negotiating Objective really represents an enduring theme in the way that I approach trade. I believe that we should use our economic power of the United States to advance human rights and good governance in other countries that may comparatively struggle on that front. I also believe that we should not have favorable free trade agreements with countries that do not believe human rights and good governance are important to uphold.

"Because of my focus on this requirement back in 2015, and thanks to USTR Ambassador Robert Lighthizer, the USMCA is a trade agreement that for the first time includes a chapter on anti-corruption and good governance. This is our first agreement that includes such a chapter and I anticipate that this will be the template for any future trade agreement involving the United States. 

"The USMCA’s anti-corruption chapter includes a number of commitments on the transparency, integrity, and accountability of public institutions and officials.

"First, on anti-corruption laws: Under USMCA, countries are required to outlaw embezzlement and solicitation of bribes by public officials and must make it a criminal offense for anyone to offer bribes to public officials to influence their official duties, or to officials of foreign governments or international organizations to gain a business advantage.

"I know that sounds like a no brainer. Why wouldn’t other countries already have those types of laws? But the reality is that they don’t. The reality is that many of our trading partners have corrupt systems and that puts American companies at a disadvantage, but also we should be using our economic power to advance our values. This chapter carries that out.

"Second, on transparency and accountability: Under the USMCA, countries must take proactive steps against corruption by implementing and maintaining accounting and auditing standards and measures that prohibit the creation of false transaction records and off-the-books accounts.

"Third, the USMCA requires parties to create codes of conduct and procedures for removal of corrupt officials, as well as adopt measures requiring officials to disclose outside activities, investments, and gifts that could create conflicts of interest.

"Fourth, on public engagement: Under the USMCA, countries also must agree to promote the engagement of the business community, NGOs, and civil society in anti-corruption efforts through information campaigns, developing ethics programs, and protecting the freedom to publish information about corruption.

"Finally, on good regulatory practices: Under the USMCA, countries must also follow a transparent regulatory rulemaking process, which the agreement clarifies includes publishing the proposed regulation with its regulatory impact assessment, an explanation of the proposed regulation, a description of any underlying data and other information, and the contact information of responsible officials.

"USMCA further requires parties to follow U.S.-like system of notice and comment periods for proposed regulatory rulemaking, in which the regulators are required to consider the comments of any interested party, regardless of nationality. This means that Americans will have input onto the regulatory process in Canada and Mexico, which has a direct effect on our access to their markets.

"The countries also agreed to publish on an early planning document of regulations the countries intent to revise in the next 12 months, and to ensure that regulations are written in a clear, concise, and understandable manner. Then, the USMCA encourages authorities to consider the impact of new regulations when they are being developed, with particular attention to the benefits and costs of regulations and the feasibility of other approaches. This is an incredibly important achievement and is an important as a model for U.S. agreements going forward.

"By including good governance and anti-corruption provisions in the USMCA, we are signaling to our trading partners and the rest of the world of what our values are; yes, economic values, but also the type of people that we are and the principles we advance.  

"However, with these good achievements in the original USMCA, the agreement did not go far enough. There was no deadline to getting it done quickly, so we chose to get it done right. I wanted to see strict, high standards in the USMCA on labor, environment, and more. Democrats were united in this message. Democrats worked behind the scenes with labor and environmental stakeholders to identify issues and create solutions that could make this agreement one we could support.

"Do I think the new USMCA lives up to these standards? Yes, I do. 

"The updated USMCA includes important provisions regarding labor standards, which have the potential to improve working conditions and create a more level playing field for U.S. workers. These changes include the Brown-Wyden Rapid Response Mechanism, which enables the United States to take swift enforcement action against imports from individual facilities, and stronger labor obligations in the agreement. The changes include a number of other important labor issues, including strengthening labor obligations, new labor monitoring mechanisms, and extra funding for labor efforts. Implementing bill includes new mechanisms and resources to ensure that the United States government effectively monitors Mexico’s compliance with the labor obligations. The result of these labor additions earn the support for the USMCA by the AFL-CIO, United Steelworkers, and International Brotherhood of Teamsters. Truly, this is an agreement that is good for labor. 

"Another critical aspect of the USMCA is to ensure that our trading partners meet environmental standards of this country. We want a level playing field. We also want to help our environment. With respect to the environment, the updated USMCA is a significant improvement over the original NAFTA. The USMCA incorporates environmental obligations into the agreement itself, which are subject to dispute settlement, unlike the original NAFTA, which only included an unenforceable side-agreement. The USMCA includes upgraded commitments on topics including fisheries subsidies, marine litter, and conservation of marine species.

"Democrats secured amendments to the agreement, as well as provisions in the implementing bill, to strengthen the ability of the United States to monitor and enforce the obligations and ensure that the parties are bound to their environmental obligations. I want to acknowledge my colleague Senator Carper, the Ranking Member of the Senate Environment and Public Works Committee, which I also sit on. Together, we pushed to improve this agreement with respect to the enforceability of the environmental provisions. We were happy to see this agreement includes many of the things Senator Carper and I worked and pushed to have done.

"Included in the new USMCA is a new trigger mechanism to give environmental stakeholders an expanded role in environmental enforcement matters and create accountability for the Administration with regards to seeking environmental enforcement actions under USMCA.

"Under the existing NAFTA, any person in a NAFTA country can make a submission an intergovernmental organization established by NAFTA to address environmental issues – alleging that a NAFTA partner is not living up to its environmental obligations. You can do that. The submissions undergo a public, fact-finding process by the head of that body, which produces a factual record if the allegation is found to have merit. But here is where the problem come in: once the production of a factual record is done there is no enforcement mechanism. We’ve corrected that. Through this new trigger mechanism that was developed, if a factual record is produced, a new Interagency Environment Committee headed by the USTR has 30 days to review the record and make a determination as to whether or not to pursue enforcement actions under USMCA against the violating country. And, if the Committee headed by the USTR decides not to pursue enforcement actions under the USMCA, the Committee within 30 days after its determination must provide Congress with a written explanation and justification of its decision. This is a huge step forward in quickly identifying and addressing any environmental actions that need to be taken under this agreement.

"In addition, the agreement includes an additional $88 million of funding appropriated over the next four years for environmental monitoring and enforcement to ensure that the goals of the USMCA’s Environmental Chapter can be realized. This includes $40 million dollars appropriated over the next four years for a new environmental sub-fund Senator Carper and I pushed to create under the USTR’s existing Trade Enforcement Trust Fund, which will be dedicated to enforcement of the USMCA’s environmental obligations.

"As I mentioned, the United States-Mexico-Canada Agreement establishes an Interagency Environmental Committee led by USTR will coordinate U.S. government efforts to monitor implementation of its environmental goals. It also establishes up to three new environmentally-focused attachés in Mexico City to help ensure Mexico is living up to its environmental obligations. It includes new reporting requirements to regularly assess the status of Mexico’s laws and regulations that are intended to implement its environmental obligations to help ensure Mexico is living up to its commitments. We believe the USMCA is a strong, enforceable agreement that makes positive strides in protecting the environment. As this agreement is implemented, I will be watching to ensure that other parties to this agreement live up to the promises that they are making in this bill. 

"In closing, I support the USMCA because it will help raise living standards for Marylanders, cut red tape for small business, and unite us with our allies. The provisions of the USMCA protect the environment, help labor organizing efforts, fight for good governance and against corruption, and is enforceable.

"I urge my colleagues to support the legislation when it comes to the floor. I yield the floor."

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