Washington — Trade groups in plastics and chemicals, along with allies in manufacturing, have been making a push for Congress to pass the updated North American free trade agreement, with some saying that it could give the manufacturing sector a boost amid signs of economic trouble.
Passing the deal could help "quickly relieve some of the uncertainty" around trade and the economic picture for manufacturing industries, American Chemistry Council CEO Chris Jahn wrote in a Nov. 22 op-ed urging quick passage.
ACC and other industry groups in a pro-United States, Mexico and Canada (USMCA) coalition have been mounting a public campaign in recent weeks as Democrats in the House and President Donald Trump try to hammer out a deal to move the agreement forward in Congress.
"USMCA isn't meant to be a cure-all for the economy," Jahn said, but passing the trade pact "may very well help stem the rising tide of doubt and uncertainty in the minds of investors, and begin to chip away at some of the issues that economists say are weighing down the economy."
He noted poor economic data such as the ACC's Chemical Activity Barometer, which dropped in October "to a level signaling a coming slowdown" and the Institute of Supply Management's Purchasing Managers' Index staying below 50 since August, which "indicates an industrial sector in contraction."
The Plastics Industry Association, the Vinyl Institute and other trade groups have joined in recent efforts to keep the issue elevated in Washington, as Democrats and the Trump administration negotiate to resolve differences around USMCA provisions on labor, the environment, enforcement and access to medicines.
USMCA advocates had been hoping for a congressional vote before the Thanksgiving holiday but now are eyeing a December vote.
House Speaker Nancy Pelosi, D-Calif., said in a Nov. 25 statement that legislators and the administration are "within range" of an agreement.
"Both sides, the House Democrats and the [U.S. Trade Representative], want to get to yes," said Ed Brzytwa, ACC's director of international trade, in an interview.
Beyond helping to shore up the manufacturing economy, he pointed to other benefits in the new trade deal over the North American Free Trade Agreement.
USMCA has better provisions around rules of origin of manufactured goods, standards for digital trade that didn't exist when NAFTA was passed in the early 1990s and regulatory harmonization, he said.
"This is a very critical moment," Brzytwa said. "This is an agreement that has to be passed on its own."
Patricia Miller, CEO of injection molder Matrix 4 Inc. and a board member at the National Association of Manufacturers, used her company's social media accounts to push for passage during a Nov. 13 day of action coordinated by industry groups.
In an interview, Miller said her small Woodstock, Ill., plastics firm doesn't directly export to Mexico or Canada but said her customer base of large, Fortune 500-type manufacturers would benefit from a trade deal.
"All of my clients are Fortune 500 and they're trading at a global level, and if trade is difficult at a global level, then that directly impacts us," Miller said. "All of my clients are exporting to Canada and Mexico. If there's not a way for them to drive trade in a reasonable and fair way, it ... hits my revenue line."
Miller said that while USMCA would not be a silver bullet for challenges in the manufacturing environment now, like the slowdown in the automotive sector, she said the updated pact takes a comprehensive approach to making U.S. manufacturing more competitive.
Brzytwa said the "most important thing" about USMCA for the chemical and plastics industry is maintaining the current duty-free trade that exists under NAFTA.
Withdrawing from NAFTA, as President Trump has threatened to do, would lead to $9 billion in tariffs on U.S. chemical and plastics exports to Canada and Mexico, making the region less competitive globally, ACC said in a 2018 study.
A top-level USMCA agreement in Washington before the end of the year would be followed by detailed implementing legislation, which has yet to be presented to Congress, and hearings before a final vote. Any changes made by the U.S. would also have to be ratified by Canada and Mexico.