New Articles

Sizing up the USMCA Compromise Package – How Various Industries Will be Impacted

usmca

Sizing up the USMCA Compromise Package – How Various Industries Will be Impacted

On December 10, Speaker Nancy Pelosi, the Trump administration, along with leaders in Mexico and Canada, announced a compromise to the new North American trade deal, known as the U.S. Mexico and Canada Agreement.  Eleventh-hour concessions by the Administration and Mexico are likely to result in a win for labor, President Trump, and ultimately market stability.

The final deal gives Democrats in Congress a few big wins in the pharmaceutical and labor industries, as well as environmental standards, and gives President Trump the victory of having his new trade deal on the path to ratification by all countries involved. Canada managed to receive much of what they requested, despite the slight opening of the Canadian dairy market to U.S. producers.

One of the biggest changes from the original draft USMCA in the compromise trade agreement is the negotiated labor monitoring and penalties for noncompliance. While the original draft required Mexico to change its laws to make it easier for workers to unionize, the compromise created an interagency committee that will monitor Mexico’s labor reform, established benchmarks and penalties for Mexico’s labor reform process, and established labor attachés in Mexico for on-the-ground reporting about Mexico’s labor practices.

Below is an outline of the changes to the USMCA – the House is expected to vote on the deal next week, though the Senate will likely not address the bill until the impeachment process has concluded:

For workers, language was removed that made it difficult to prove that trading partners are not protecting workers from violence in their respective countries. Now, Mexico has agreed to a “rapid-response labor mechanism” (see ANNEX 31-A) that allows independent, multinational three-person panels to investigate Mexican factories. Mexico, too, can have a panel investigate factories in the U.S. If a violation of union rights is found, a complaint can be filed, and the country making the accusation can determine the period of time that the accused county can have to address the concern. Provisions against Forced Labor also remain strong in the agreement. The deal is expected to also create 176,000 new jobs in the U.S. (See Article 23.3-23.4, ‘Labor Rights.)

For the environment, Democrats have promised that the deal has an added commitment that all the countries will have seven multilateral environment agreements (MEAs), alongside language that will allow the list to grow over time. Provisions include prioritization and monitoring of MEA commitments, and maintain and strengthen the protection of endangered species, the Montreal Protocol, prevention of pollution from ships, regulation of whaling, protection of the Ozone Layer and more (Article 1.3 Amendment and Article 24.9 Amendment)

For the pharmaceutical industry, the deal’s former provision that gave biologics a 10-year exclusivity period on the market is now entirely taken out. Democrats argued against the exclusivity period, concerned it could increase the cost of drugs, and succeeded in eliminating language that allows patent evergreening – when brand-name drug manufactures extend patents an additional to maintain power in the market when a new or related drug is created. (See the deletion of Article 20.49 ‘Biologics’)

For the internet, a Democratic concession led to maintained protections in the USMCA for technology companies, giving legal immunity for content posted by their users, as well as legal protections when these companies seek to moderate platforms. These provisions remain the same from Section 230 of the Communications Decency Act of the USMCA.

For the steel industry, while the deal already exempted the Canada and Mexico from steel and aluminum tariffs, the revised agreement has strict rules of origin in the automotive industry. The deal states that seven years after entry into the USMCA, all steel manufacturing must occur in one or more of the countries involved, except for the refinement of steel additives. Ten years after the agreement, the countries will consider appropriate requirements in the interest of all parties for aluminum to also be considered. (See Chapter 4, ‘Rules of Origin’)

For Canada and dairy, the U.S. will be able to export 3.6% of Canada’s dairy market, currently at 1%. Dairy companies in the U.S. can sell their products into Mexico duty-free, with access to common-named cheeses, while Canada is opening its market with more duty-free quotas for U.S. dairy products. The deal eliminates Canada’s 6/7 milk pricing system, and holds Canadian export of dairy to the standards of international trade rules.

And for the auto industry, in order to avoid tariffs, a car or truck must have 75% of its components made in the U.S., Mexico or Canada, up from 62.5% today.  Also, workers making the cars or trucks, at least 30% of the work, must be earning at least $16 an hour. By 2023, that number is 40% of the work done on cars.

With the United States positioning itself to negotiate several more trade deals, labor hopes that these last-minute changes set a benchmark for labor standards and enforcement moving forward and, likewise, the President hopes it demonstrates he can close a major trade deal.

___________________________________________________________

Note: Ryan Bernstein, formerly chief of staff to Senator John Hoeven (R-ND) is a senior vice president with McGuireWoods Consulting federal public affairs group.Mariam Eatedali is a research associate at McGuireWoods Consulting; she previously consulted with former representatives and senators to address foreign economic and diplomatic concerns while she was a fellow for the U.S. Association of Former Members of Congress

Essential Tips on Writing International Trade Policy Op-eds

Op-eds express the opinions of the writers by conveying a response to an argument or a call to action. They react to a published article either in the newspaper or a website with the aim of reaching the public. Concerning international trade policy, op-eds can be used to reshape the public opinion, especially since in this platform the writer represents the local voices. The article aims to analyze some of the tips on writing international trade policy op-eds that will enable the writer’s opinions to connect with the reader.

Use a hook that attracts attention

The hook of the argument should be reflected in the headline as it assists the readers to catch the essence of the op-ed quickly. It is essential to highlight how the trade policy will affect businesses and communities and this is reflected in the hook. The argument of the op-ed is presented on the first line and demonstrates the stand of the writer based on the mater. The hook shows the reader why they should care about the issue especially if it is getting little media attention. Use a tone that is incontrovertible and highlight irony and contradictions to emphasize the argument. According to Amanda Sommer, Head of Content Writing at APA Outline service, the hook should tell the readers why they should care by telling them how the existing policy impacts their life in one way or another.

Present opinions clearly and uniquely

The opinion editorial should demonstrate importance by expressing an opinion and backing up the facts and ultimately present a solution. The argument should be based on a timely topic regarding the international trade policy topic and talk about the benefits and drawbacks of the new trade policy. The argument should be based on a timely topic and should quickly grab the attention of the reader. Before establishing the problem of the argument, it is essential to analyze why the readers should care.

Understanding what the public needs to hear and demonstrating predominance through a news hook ensures that the message gets to a multitude of people and might lead to the intended change. “Clearly express one major opinion early on in the argument to avoid leaving the readers wondering what the goal of the op-ed is,” advises Jill Peters, Senior Content Creator at ConfidentWriters. Give a concrete call to action to the reader on the way forward and recommendations on how they can take part in bringing change on public policies, especially since their voice carries more weight on policy formulation.

Know your audience

It is essential not to underestimate the level of information that the audience has concerning the topic as well as overestimate their intelligence. It is vital to comprehend that using simple and compelling language that attracts their attention should be the goal of the op-ed as it will influence their readership and their response to the call to action. Knowing the intended audience assists the writers in using a reliable outlet to reach them. Matters on international trade policies can be published on a website, especially since the world has become digitally connected.

Matters on international trade policies can be published on a website, especially since the world has become digitally connected. This ensures that members from the global community can pitch in and share their opinions with the intended audience to have an impact on change. Personalizing the op-ed by using local anecdotes grabs the attention of the reader, especially if the argument is based on facts. Audiences are more intrigued by writing that connects with them, especially since lawmakers make their decisions based on their opinions. Tapping into their emotions by emphasizing the impacts the policy will have on their livelihoods and their communities may drive the readers to respond to the call to action.

Suggest feasible solutions

Feasibility emphasizes that solutions be actionable and practical. This is necessary if the writer is basing their argument on international trade policies that arguably seem to put particular groups at a disadvantage. The solution is mainly summarized at the end of the argument and it is meant to make the argument credible and convincing.

Emphasize on the key messages which may include the importance of trade currently on the global community and the impact of lack of trade deals on certain organizations. Give an example of a context where the solution has shown change and present credible sources to prove this fact. Provide practical steps and recommendations that avoid appealing for political will as it will show the readers that the op-ed has no solution. If the situation has no solution yet, it is also critical to state that some problems are insoluble to enable the readers to critically think of potential solutions.

The article analyzed some of the tips in writing international trade policy op-eds to ensure that that the readers understand how policies impact their lives. Thinking about the audience and how to grab their attention with an engaging hook and a personal note improves their readership as well as their response to the call to action.

Paul Bates is a writer and editor at Paper-Research.com and SwiftPapepers.com. He also contributes to HuffPost, Medium, and Paperadepts.

New HSBC Report Urges Pro-Trade Policies

New York, NY – Though the US “continues to confront a competitiveness challenge of too few quality jobs and too little income growth, there is a future in which America can create millions of good jobs connected to the world via international trade and investment,” according to “Made in America – Made for Trade,” a new report released by HSBC.

Reaching that future, though, “will require US policies that are based on a sound understanding of how American companies succeed in today’s dynamic global economy, and of the critical role that trade finance plays in that success,” writes the report’s author, Prof. Matthew Slaughter of the Tuck School of Business at Dartmouth College.

The US, he concludes, could boost productivity and revitalize the economy in the next decade if the country “pursues an expansive and connected set of pro-trade policies in the areas of international trade, investment, immigration, tax, and the social safety net.”

The report’s major points:

* In absolute dollars, US exports have more than doubled from$1.04 trillion in 2003 to $2.26 trillion in 2013. “The net result has been a commensurate surge in how important exports are to the total US economy.”

* In the past three years, exports as a share of US GDP reached about 13.5 percent; the highest share since at least 1947.

* Exporters and importers “are more capital-intensive, more productive, and pay higher wages – about 15-20 percent higher for companies that trade and about 25-30 percent higher for multinational companies.”

* The tally of US companies that export has risen steadily in recent years, reaching a record 304,867 in 2012. Small and medium-sized companies – those that employ 500 workers or fewer – accounted for over 97.7 percent of this total count, at nearly 298,000.

* International trade “has boosted annual US income by at least 10 percentage points of GDP relative to what it would have been absent this global engagement. That translates into an immense aggregate gain in 2013 of at least $1.7 trillion, an average gain of over $13,600 per US household per year.”

* An aggressive pro-trade policy initiative could create, over the next decade, about 10 million new high-paying trade-connected jobs in America: one million per year or about 100,000 per month. This is indeed an aggressive goal. But it is also one that is no doubt attainable.

The HSBC Made for Trade report was crafted as an on-tour “national conversation” with leaders in business, government, industry and academia in four US cities whose economies have been shaped by global trade holding discussions on the role of global trade in today’s economy.

The national tour looks at the contribution of international flow of goods, services and capital to the US economy, and the opportunities for American businesses brought about by global trade.

10/02/2014