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Trump To Visit Michigan Auto Workers After Signing USMCA

January 29, 2020

MLive

Malachi Barrett

President Donald Trump will visit Michigan workers to celebrate Wednesday’s signing of a revised North American Free Trade Agreement replacing what he called “the worst trade deal ever made.”

The United States-Mexico-Canada Agreement replaces a 1994 deal widely criticized for allowing companies to move their manufacturing facilities across the southern U.S. border to take advantage of cheaper labor. The White House says the new deal will create a more balanced, reciprocal trade environment that supports high-paying jobs for Americans and Michiganders in particular.

“After NAFTA’s adoption more than 25 years ago, the United States lost nearly one-fourth of all of its manufacturing jobs, including more than one in five vehicle manufacturing jobs,” Trump said. “Entire communities were devastated from Ohio to Pennsylvania to Michigan to Maine.”

The deal is expected to create 176,000 new jobs and add $68.2 billion to the economy, according to the White House. Trump touted its benefits for Michigan’s car production and agriculture industries and will visit a Warren auto parts supplier to celebrate the key policy victory on Thursday.

“Two decades of politicians ran for office vowing to replace the NAFTA — and this was a catastrophe: the NAFTA catastrophe,” Trump said Wednesday. “Yet once elected, they never even tried. They never even gave it a shot. They sold out. But I’m not like those other politicians, I guess, in many ways. I keep my promises, and I’m fighting for the American worker.”

The president campaigned heavily on scrapping NAFTA during the 2016 election. Trump called NAFTA and the now-dead Trans-Pacific Partnership a disaster for Michigan and other manufacturing-heavy Midwest states he would go on to win.

Trump’s Thursday visit will bring him to Macomb County, one of the key swing areas that helped him win Michigan in 2016. Voters in Macomb County had supported former Democratic President Barack Obama in the two previous elections, but the area flipped for Trump by a large margin.

The largest employers in the county are Michigan’s Big Three automakers — General Motors Co., Fiat Chrysler Automobiles and Ford Motor Co.

Legislation implementing the USMCA received bipartisan support in Congress, and Michigan’s representatives on both sides of the aisle applauded the deal in statements released Wednesday. However, businesses were kept waiting for most of 2019 while negotiations between Democratic lawmakers and the Trump administration unfolded.

Trump had threatened to leave NAFTA before the new deal was in place, creating some uncertainty in the business community. Detroit Chamber of Commerce CEO Sandy Baruah said businesses delayed plans for expansion and chilled future investments after the president announced he would scrap NAFTA.

Baruah said Michigan businesses are breathing a sigh of relief now that the long-awaited replacement deal is finalized.

“Regardless of who you are in the business community, or what you may think of Donald Trump, the business community is somewhere between relieved and excited that USMC has finally turned the corner,” Baruah said. “It really provides the certainty that businesses, especially the auto community, need to plan and invest going forward.”

Canada and Mexico purchase more exports from Michigan than the rest of the world combined, The two countries bought nearly $35 billion in Michigan goods in 2018, according to the Michigan Manufacturing Association.

USMCA is expected to create up to 76,000 new auto jobs, spur $34 billion in new investment in the auto industry, and add $23 billion in auto parts purchases annually, according to the White House.

Automobiles must have 75% of their components manufactured in North America, increasing the 62.5% standard under NAFTA.

American agricultural exports are expected to increase by $2.2 billion, and Canada has agreed to expand market access for American dairy, egg, and poultry producers.

Baruah said the new deal is essentially a modernized version of the previous agreement, a “NAFTA 2.0” as some have called it. It also includes new protections for intellectual property and technical improvements to address e-commerce issues.

A group of House Democrats, including U.S. Rep. Debbie Dingell, D-Dearborn, said Trump isn’t the sole architect of the trade agreement. Democratic lawmakers said the deal wouldn’t have passed without tweaks made during a lengthy negotiation process last year.

Dingell said replacing NAFTA is long overdue. Manufacturing facilities in her district west of Detroit still sit empty after good-paying jobs were moved across the border to Mexico, she said.

Dingell said the USMCA has “significant improvements” over the previous trade agreement and begins to level the playing field with workers in Mexico by raising wages.

The USMCA requires 40 to 45 percent of automobile parts to be built by workers who earn at least $16 an hour and includes provisions to hold Mexico accountable for labor standards. Mexico also committed to expanding access to unions for its workers.

However, Dingell said the deal “won’t undo the deep damage that’s been done to American workers since NAFTA was passed.”

“It’s not just going to uproot factories from overseas and bring them back home,” Dingell said Wednesday. “We have to keep investing in workers.”

Baruah said the cost of labor isn’t the only reason businesses move their facilities. One of the reasons many companies decide to manufacture vehicles in Mexico is due to the country’s free trade agreements with other countries, he said.

“You don’t see many Silverados driving around the streets of Tokyo or London, those vehicles are still made in the United States because they’re domestically consumed,” Baruah said. “When you look at cars that are sold globally, a great example would have been the Chevy Cruze, which they no longer sell the United States but they still sell globally. They make a lot of those Mexico just because they’re easy to export to other parts of the world.”

Trump also celebrated recent investments announced by automakers in Michigan during the USMCA signing Wednesday.

General Motors announced plans to invest $2.2 billion transform its Detroit-Hamtramck Assembly, which had been set to idle this year, into a new state-of-the-art electric vehicle factory. Ford Motor Co. plans to invest $1.5 billion in its Wayne and Dearborn assembly plants.

‘I expect to see the president and Vice President Pence and all their surrogates in the state a lot,” Baruah said. “Michigan is going to be a battleground. I think we’re going to be a popular stop over the next several months by all the candidates, so get ready.”

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