Chamber CEO: USMCA, TPP membership beneficial

Date: Friday, January 11, 2019
Source: American Shipper

During the chamber’s annual State of American Business address, Donohue gave a broad endorsement of free trade, noting that 49 of 50 businesses that sell goods overseas are small businesses. 

 “The bottom line is this is one of the best business, geopolitical, economic, national security agreements put together with any countries that we deal with,” he said during a press conference following the address. “And by the way, remember [Canada and Mexico are] our two largest export partners. If we can’t sell that, we better find another job.” 

Later during the press conference, Donohue said sometime after USMCA is activated, he believes the U.S. will rejoin TPP.

“My view is we’re going to get back there in a reasonable period of time, just because it’s good business, but you get a lot of collateral values,” he said. 

Since President Donald Trump withdrew from TPP in January 2017, the remaining 11 members of the agreement have reduced tariffs on agriculture and several areas to rates lower than the U.S., and the pact puts members on a strategic footing to deal with the economic powerhouse of China, Donohue added. 

The TPP-11 entered into force Dec. 30. 

 “I do believe more in multilateral trade agreements than may be the case with the [Trump] administration, and I do believe that’s a constructive debate and we’re going to end up in a good place,” Donohue said. “Stay tuned.” 

But in the nearer term, Donohue cautioned against any potential U.S. withdrawal from NAFTA with Congress expected to soon consider implementing legislation for USMCA.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, on Wednesday said the Trump administration should withdraw from NAFTA if congressional Democrats want the USMCA renegotiated.

But Donohue noted that 14 million American jobs depend on NAFTA, and that withdrawing from the existing deal would start a six-month expiration clock that would force Congress to act in some way.

Some analysts believe Trump doesn’t have the authority to unilaterally withdraw from NAFTA, and that after Trump would notify Canada and Mexico of withdrawal, Congress would have to affirmatively effectuate changes to U.S. law to bring U.S. tariffs back up to pre-NAFTA levels.

But that matter isn’t totally settled, as the NAFTA text states that any member government can pull out of the deal after providing notice to the other parties.

Donohue also pushed for congressional efforts to pass broad infrastructure legislation this year.

“I’ve been working on these issues for more than 30 years,” Donohue said in his remarks. “It is my hope that the public and private sector leaders of this country will finally come together and help build the next generation of U.S. infrastructure — a modern, safe and efficient system that history will regard as one of the great American feats of the 21st century. Is that too ambitious? Good. Let’s go do it.”

The Chamber will offer cash prizes totaling $25,000 for those who can come up with the “best, most viable ideas for a long-term sustainable funding source for infrastructure,” according to Donohue.

Legislation could address ports, airports, inland waterways and several other infrastructure areas, and several administration officials will likely push for such a bill this year, as U.S. infrastructure remains in need of updates, Donohue said.


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