EL PASO, Texas (Border Report) — The Senate on Thursday ratified the new U.S.-Mexico-Canada Agreement (USMCA), something lawmakers and industry leaders say will bring additional jobs and trade to North America.
But some experts warn that America’s border infrastructure may not be ready to cope with additional commerce at our ports of entry.
“Uncertainty is the enemy of private sector investment, job growth and economic development. With the ratification today of the USMCA, the air of uncertainty has been eliminated and I’m optimistic we’ll see a fresh round of significant private sector investment,” said Jon Barela, CEO of El Paso’s Borderplex Alliance.
However, “the work is not done. Now we have to pivot as a region in a bipartisan way to make sure our ports of entry here and across the border with Mexico are funded adequately. … We can have the greatest trade agreement on paper, but when we experience wait times that are unacceptable — three, four, five hours and more — it limits the job creation opportunities that we can achieve,” he said.
Federal government studies have shown that a minimum investment of $5 billion is needed to upgrade Southwest ports of entry for increased trade, he said. Already, border officials complain of a shortage of 1,000 of more Customs and Border Protection (CBP) officers just to handle current trade levels.
The USMCA is a three-country accord that ensures more native content and a minimum wage for the automotive industry, sets rules for ecommerce and updates labor and environmental protections contained in the old North American Free Trade Agreement (NAFTA).
The treaty was initially opposed by organized labor, which gave in after lawmakers widened oversight over labor violations in Mexico. Border activists who still remember the flight of thousands of textile jobs to Mexico prior to and after the enactment of NAFTA in 1994 continue to oppose it.
But on Thursday, lawmakers from Phoenix to Austin praised the new deal and predicted swift job creation.
“This new trade agreement means more jobs and opportunities in Arizona. And it paves the way for even more trade in the future,” Arizona Gov. Doug Ducey said. “Already, trade with Mexico and Canada supports more than 228,000 Arizona jobs and $20 billion annually. The USMCA will strengthen these relationships and set the stage for a new generation of closer economic ties with our international neighbors.”
U.S. Sen. Ted Cruz, R-Texas, said he was proud to vote for approval of the USMCA, which he anticipates will create 180,000 new American jobs and boost the U.S. gross domestic product by $70 billion.
“Texans know firsthand the importance of international trade, especially with Mexico and Canada. That’s because no state in the union has more invested in trade with our neighbors than the Lone Star State. As a fierce competitor on the international stage, Texas is home to more than 2.2 million jobs dependent on trade,” Cruz said.
But he chided other lawmakers for giving transnational technology companies special immunity from liability.
“While I support USMCA, I am disappointed Big Tech’s special immunity from liability – often referred to by Section 230 of the Communications Decency Act – was included in the final agreement. More and more Americans are concerned about Big Tech’s pattern of political bias and censorship, and enshrining 230 provisions in our trade agreements is a mistake,” Cruz said.
Even the North American Development Bank offered a statement in support of USMCA ratification. The pact includes $300 million in funding for the Border Water Infrastructure Program of the U.S. Environmental Protection Agency, as well as a $215 million capital increase for the bank.
“More than 17 million US-Mexico border residents have been positively impacted by the Bank’s financing of environmental infrastructure. I am pleased that our work in partnership with our many border stakeholders is being validated through the inclusion of the capital increase in USMCA,” said Dr. Calixto Mateos-Hanel, Managing Director of the NADBank.
As for when American industry can expect to see the new jobs, El Paso’s Barela said it would be soon.
“I believe there will be thousands of jobs created in the short term and in the long term (the trade agreement) will continue to sustain the upward momentum of job creation our region has experienced in the past few years,” Barela said. “The good news is that this is going to continue. The better news is that virtually every sector — from retail to logistics to professional services — should see a nice spike in job creation because of ratification of USMCA.”
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