Editor’s note: The International Trade Commission report on the US Mexico Canada Agreement is out. It finds that a modest boost to employment and output will result. The administration is readying implementing legislation for Congress to vote on in an up or down manner. Whether Speaker Pelosi will allow a vote, despite Fast Track provisions, is the next question.
If “fully implemented and enforced,” the U.S.-Mexico-Canada Agreement will have a small but positive impact on U.S. GDP, with digital trade and automotive rule-of-origin provisions projected to have “the most significant effects,” the U.S. International Trade Commission says in its new analysis of the deal.
[Isabelle Hoagland | April 18, 2019 | Inside US Trade]
“The model estimates that, if fully implemented and enforced, USMCA would have a positive impact on U.S. real GDP and employment,” the report states. Some lawmakers and outside analysts had predicted the report might show a slightly negative impact on the economy.
The Commission estimates that USMCA would boost U.S. GDP by $68.2 billion and would add roughly 176,000 jobs.
Additionally, “U.S. exports to Canada and Mexico would increase by $19.1 billion (5.9 percent) and $14.2 billion (6.7 percent), respectively. U.S. imports from Canada and Mexico would increase by $19.1 billion (4.8 percent) and $12.4 billion (3.8 percent), respectively,” the report states.
The ITC 's model “estimates the U.S. economy’s complete adjustment to the full implementation of USMCA, which is assumed to be year 6 after USMCA enters into force,” the report states. “Therefore, the estimates show the impact of the modeled provisions after the economy has responded to the changes in USMCA. The estimates show the incremental effects of USMCA relative to a baseline that reflects the U.S. economy in 2017 and assumes that no other changes to the economy unfold. The model is longterm and does not estimate effects during a transition.”
The ITC found the deal would boost “all broad industry sectors within the U.S. economy,” but manufacturing “would experience the largest percentage gains in output, exports, wages, and employment, while in absolute terms, services would experience the largest gains in output and employment.”...
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