President Donald J. Trump signed the U.S.-Mexico-Canada Agreement (USMCA) this week, calling it “a tremendous breakthrough.”
The California Chamber of Commerce supports the USMCA based on an assessment that the agreement serves the employment, trading and environmental interests of California, the United States, Mexico and Canada, and is beneficial to the business community and the California and national economies.
“Mexico and Canada are two of California’s strongest trading partners and trade with Mexico and Canada supports nearly 14 million U.S. jobs,” said Allan Zaremberg, CalChamber president and CEO. “The USMCA is a necessary modernization to NAFTA that recognizes the impacts of technology on the three countries’ economies.”
The objectives of the USMCA are to eliminate barriers to trade, promote conditions of fair competition, increase investment opportunities, provide adequate protection of intellectual property rights, establish effective procedures for implementing and applying the agreements and resolving disputes, and to further trilateral, regional and multilateral cooperation.
Due to California’s position as a global leader in international trade, the priorities of the USMCA are important to the CalChamber’s members and the overall economic health of the state.
The trade pact still needs to be ratified by Canada. The deal will not take effect until 90 days after the last country ratifies the deal.
Approximately 11 million American jobs rely on trade with Canada and Mexico. In California alone, trade among the three countries supports 1,470,700 jobs.
Mexico and Canada are California’s top export partners. Mexico is the state’s No. 1 export market, with California exports to Mexico increasing to $30.7 billion in 2018, up from $26.7 billion in 2017. Mexico purchases 17% of all California exports.
California’s exports to Mexico are driven by computers and electronic products, which account for 25.8% of all California exports to Mexico. Other top categories include transportation equipment, nonelectrical machinery, and electrical equipment, appliances and components.
Canada is California’s second largest export market, purchasing 9.9% of all California exports. In 2018, California exported more than $17.75 billion to Canada.
Computers and electronic products remained California’s largest exports, accounting for 32.5% of all California exports to Canada.