Historic week for trade, workers


Recently, I participated in a roundtable at Fecon, an agricultural equipment manufacturer in Southwest Ohio. Our discussion included some of the biggest issues affecting Ohio business owners, farmers, and employees, including tax reform, workforce development, and the international trade agenda.

Like many other businesses in Ohio, Fecon cares about trade because they want to see a level playing field — they want fewer barriers so they can sell more of their products overseas while ensuring that foreign products are not competing unfairly with them in the U.S. market.

It’s no surprise that Ohioans care about this issue — we depend on trade to help our economy thrive. About 25 percent of Ohio’s factory workers make products that get exported, and one out of every three acres planted by Ohio farmers are exported. These are good jobs, too – jobs dependent on trade pay, on average, 16 percent more than their non-trade counterparts, and have better benefits. That’s why it’s good news that these last few days have brought two historic trade agreements that will reform some of our most critical trade relationships and provide more opportunities and certainty to Ohio’s economy.

Canada and Mexico are Ohio’s two biggest trading partners, so I’m pleased we passed the U.S.-Mexico-Canada Agreement (USMCA). I supported the Trump administration’s efforts to negotiate a strong agreement and helped secure the votes for it in Congress. USMCA helps to level the playing field for U.S. workers, farmers, and small business owners in a number of ways.

First, USMCA will raise labor standards and increase North American content requirements for automobiles to bring more manufacturing jobs to Ohio. NAFTA requires 62.5 percent of an auto to be North American-made to get the benefits of the trade agreement. USMCA increases that to 75 percent, and says 70 percent of the steel in automobiles must also be made in USMCA countries. That’s the highest of any U.S. trade agreement, and it means more jobs in the U.S. and fewer auto parts, steel, and other imports from other countries like China that might seek to free ride on our trade agreement.

USMCA also expands market access so that the farmers who produce milk, eggs, poultry, wheat and more so Ohio can export more. It’s a light at the end of the tunnel for Ohio farmers who have been dealing with bad weather and low prices. And it will benefit locally owned businesses like Fecon, who will see more farmers buying agricultural equipment as their sales increase.

Finally, USMCA puts in place rules of the road for internet sales to make it easier for Ohio small business to sell to customers in Canada and Mexico.

Unsurprisingly, the independent International Trade Commission (ITC) estimates that USMCA will create at least 176,000 new jobs, including more than 20,000 in our auto industry.

In addition to the Senate passing USMCA, this past week President Trump also signed phase one of a new trade relationship with China. This first part of a two-part agreement makes significant strides in ensuring that China plays by the rules on trade. Right now, China is able to use currency manipulation, intellectual property (IP) theft, favoritism towards state-run enterprises, and a lack of transparency for U.S. companies to disadvantage U.S. companies and workers. These unfair and often illegal trade practices are part of the reason why we’ve had a trade deficit with China of almost $400 billion.

Fortunately, the phase one trade agreement takes a number of positive steps towards fixing the U.S.-China trade relationship. It helps reduce our trade deficit by requiring China to increase its purchases of American products by at least $200 billion over the next two years, with additional increases likely in the future. This includes $50 billion of agricultural products along with reduced barriers for specific products like beef, soybeans, and corn.

Beijing has also committed to eliminating unfair pressure on U.S. companies to transfer IP to Chinese firms as a condition of doing business in China. This is a critical step in addressing the IP theft that China uses to unfairly fuel its rise.

The agreement also allows U.S. trade enforcers to better monitor any potential currency manipulation by China, which they have used in the past to unfairly boost their exports.

Overall, this phase one agreement is a good first step towards creating a more balanced relationship between our two countries, but our trade relationship will remain durable only if we enforce these agreements. That is why we can re-impose tariffs if needed.

There will be more work in the months ahead to solve some remaining trade challenges. In particular, we must ensure the phase two agreement with China fully addresses their unfair trade practices.

For Ohio farmers, workers, and businesses, however, it was a good week, because now they have a better opportunity to compete. If our trade is fair, I have confidence that we can compete, win, and create more jobs and better wages. Thanks to the hard work of the Trump administration, American workers, small business owners, manufacturers, and farmers will soon benefit from healthier trade relationships with our three biggest trading partners.


By Rob Portman

U.S. Senator

Rob Portman is a United States Senator from the state of Ohio. He can be reached online at www.portman.senate.gov.

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