Lawmakers will apparently spend most of the next few weeks consumed with impeachment, a topic that’s already swallowed a good part of the legislative calendar.
But even as that process grinds forward, Congress can prove it can still enact sensible policy, contribute to economic growth and accomplish necessary things. A bipartisan deal on an important issue, the United States-Mexico-Canada Agreement, is at hand.
This free trade bill has bipartisan support, which makes sense, because USMCA would be good for the economy. The federal government’s International Trade Commission says USMCA would boost economic growth and create American jobs, something that politicians in both parties can rally behind. Leaders of all three nations signed USMCA last year, although Mexico is the only country to have passed it so far.
Canada’s new government is expected to ratify it when American lawmakers do. Republican lawmakers are confident they can move the agreement through the Senate, but first it needs to pass the House.
There’s no need to waste time. USMCA was hammered out late last year by the three countries as a modernization of the North American Free Trade Agreement, which has a proven track record of expanding trade among the three countries. During the first half of 2019, Mexico was the largest trading partner of the United States, followed by Canada.
Free trade is especially important to the American economy. Forbes reports that Texas accounted for almost a quarter of NAFTA trade last year. Midwestern states — including Michigan, Ohio and Indiana — are major beneficiaries of trade as well. Close to half of those exports go to neighboring Mexico, and we’re seeing an uptick in exports to Canada as well. That means tens of billions of dollars in goods and services, led by oil, natural gas, motor vehicle parts, dairy and poultry.
That trade helps fuel the commercial real estate sector.
CBRE (a real estate research service) reports that warehouse inventory alone has increased by 3.3 billion square feet since NAFTA took effect in 1994. But concerns about a trade war are slowing the rate of growth. According to NAIOP’s Industrial Space Demand Forecast, absorption is now expected to average 37 million square feet per quarter for the next two years, down from the 60 million square feet of quarterly net absorption experienced during 2017 and 2018. The report’s authors explained, “Industrial is uniquely exposed to trade activity and manufacturing activity, which are very much impacted by the tariffs.”
This new agreement would boost trade by easing some Canadian dairy restrictions, improving auto making requirements and updating the policies surrounding digital intellectual property.
Free trade matters to commercial real estate because so many products move through our warehouses. It should matter to everyone else too, because so many American jobs depend on trade. So while Washington is consumed with political questions, free trade doesn’t need to be a partisan issue.
“We are within range of a substantially improved agreement for America’s workers,” House Speaker Nancy Pelosi said last month. “We need to see our progress in writing from the Trade Representative for final review.” Recently, Trump administration negotiator Robert Lighthizer sent Democrats that updated language after winning concessions from his Mexican counterpart.
So it’s time for Democrats and Republicans to work together, so all Americans can enjoy the bump in economic growth that’s expected to follow. But the congressional schedule is tight, with several competing priorities coming up. Lawmakers should move quickly, and not allow this opportunity to pass them by.
