[CTC] USITC Report & Initial Responses (more to follow)

Thu Apr 18 14:55:04 PDT 2019

GTW statement…

Modest Projections in Today’s ITC Assessment of the Revised NAFTA Do Not Alter Its Prospects in Congress

Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch

Note: The U.S. International Trade Commission (ITC) today released a study on the potential economic impact of the revised North American Free Trade Agreement (NAFTA) that projects minuscule economic gains in real GDP of $68.2 billion, or 35/100 of one percent. The highest projected gains in wages, employment and output are all less than one-half of one percent – with most figures much lower. Undergirding a large share of those tiny gains is an assumption that locking in lengthy intellectual property monopolies and freezing environmental and consumer safeguards leads to economic gains and no downsides. The report projects that over time, the agreement would add 175,800 jobs, which is less than one-fifth of what the U.S. government has certified as lost to the original NAFTA. <https://www.citizen.org/trade-adjustment-assistance-database>  Public Citizen will soon release a detailed summary of findings.

“The minuscule projected gains in this long-awaited official government assessment contradict Donald Trump’s grandiose claims that it will lead to ‘cash and jobs pouring into the U.S.’ and reinforces congressional Democrats’ views that absent more improvements, the revised deal won’t stop NAFTA’s ongoing damage.

The ITC’s past trade-pact projections have been so entirely wrong — in direction, not just in scale — that today’s findings of minuscule gains would have limited effect on the debate had Trump not set such a high bar by overselling this as a new species of trade deal that would miraculously reverse NAFTA’s decades of damage.

This report does nothing to alter the reality that the prospects for a NAFTA 2.0 vote rely largely on whether the administration engages with congressional Democrats and then with Canada and Mexico to improve the text signed last year. That congressional Democrats, unions and others who have outright opposed past pacts seek improvements rather than the deal’s demise reveals there is a path to build broad support. But absent removal of new monopoly protections for pharmaceutical firms that lock in high drug prices and strengthened labor and environmental standards and enforcement, the deal is not likely to garner a majority in the U.S. House of Representatives. Indeed, all four of the trade deals Congress enacted in the past decade required changes to their texts after the pacts were signed in order to pass the House.”

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

> On Apr 18, 2019, at 4:58 PM, Arthur Stamoulis <arthur at citizenstrade.org> wrote:
> 
> USITC report and statements from IATP and the Sierra Club…
> 
>  
> The U.S. International Trade Commission announces the release of:
> 
> United States-Mexico-Canada Agreement: Likely Impact on the U.S. Economy and Specific Industry Sector <http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTkwNDE4LjQ5MTUxNDEmbWVzc2FnZWlkPU1EQi1QUkQtQlVMLTIwMTkwNDE4LjQ5MTUxNDEmZGF0YWJhc2VpZD0xMDAxJnNlcmlhbD0xODA4MjcyOCZlbWFpbGlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmdXNlcmlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&100&&&https://www.usitc.gov/publications/332/pub4889.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery>
> USITC Publication 4889
> Investigation No. TPA-105-003
> 
> Summary:
>  
> 
>  <http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTkwNDE4LjQ5MTUxNDEmbWVzc2FnZWlkPU1EQi1QUkQtQlVMLTIwMTkwNDE4LjQ5MTUxNDEmZGF0YWJhc2VpZD0xMDAxJnNlcmlhbD0xODA4MjcyOCZlbWFpbGlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmdXNlcmlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&101&&&https://www.usitc.gov/publications/332/pub4889.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery>
> The U.S. International Trade Commission (USITC) has released its report assessing the likely impact of the United States-Mexico-Canada Agreement (USMCA) that the President entered into with Mexico and Canada on November 30, 2018.
> 
> As requested by the U.S. Trade Representative and required by the Bipartisan Congressional Trade Priorities and Accountability Act of 2015, the USITC’s report, United States-Mexico-Canada Agreement: Likely Impact on the U.S. Economy and Specific Industry Sectors <http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTkwNDE4LjQ5MTUxNDEmbWVzc2FnZWlkPU1EQi1QUkQtQlVMLTIwMTkwNDE4LjQ5MTUxNDEmZGF0YWJhc2VpZD0xMDAxJnNlcmlhbD0xODA4MjcyOCZlbWFpbGlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmdXNlcmlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&102&&&https://www.usitc.gov/publications/332/pub4889.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery>, provides an assessment of the likely impact of the agreement on the U.S. economy as a whole and on specific industry sectors and the interests of U.S. consumers.
> 
> In making its assessment, the Commission investigated the impact the agreement would have on the U.S. gross domestic product; exports and imports; aggregate employment and employment opportunities; and the production, employment, and competitive position of industries likely to be significantly affected by the agreement. In addition, as requested, the Commission, in making its assessment, has reviewed available economic literature regarding the agreement, including literature concerning any substantially equivalent proposed agreement. The Commission provides a description of the analytical methods used and conclusions drawn in such literature as well as a discussion of areas of consensus and divergence between the Commission’s analyses and conclusions of other economic assessments reviewed.
> 
> The Commission’s quantitative analysis of USMCA is broader than the quantitative analysis done in prior Commission reports. Some of the new analysis represents improvements to modeling approaches that were used in previous studies, improvements made possible by recent advances in economic research and greater availability of data. For example, many nontariff provisions such as the changes to automotive rules of origin, increased intellectual property rights protections, collective bargaining requirements, de minimis thresholds, and reductions to investor-state dispute settlement mechanism are quantified to a greater extent than possible in past studies. In another example, the USMCA analysis incorporates the estimated effects of commitments to maintain current regulatory conditions, such as those affecting international data transfers and cross-border trade and investment in services sectors.
> 
> Main Findings:
> 
> The Commission used a combination of detailed quantitative and qualitative industry analyses and an economy-wide computable general equilibrium model to assess the likely impact of USMCA on the U.S. economy and industry sectors. The model estimates that, if fully implemented and enforced, USMCA would have a positive impact on U.S. real GDP and employment.
> The elements of the agreement that would have the most significant effects on the U.S. economy are (1) provisions that reduce policy uncertainty about digital trade and (2) certain new rules of origin applicable to the automotive sector. Of interest to stakeholders in many sectors, particularly services industries, are USMCA’s new international data transfer provisions, including provisions that largely prohibit forced localization of computing facilities and restrictions on cross-border data flows. Industry representatives consider these provisions to be a crucial aspect of this agreement in terms of changing certain rules of trade across industry sectors, especially given the lack of similar provisions in the North American Free Trade Agreement (NAFTA).
>  
> Because NAFTA has already eliminated duties on most qualifying goods and significantly reduced nontariff measures, USMCA’s emphasis is on reducing remaining nontariff measures on trade and the U.S. economy; addressing other issues that affect trade, such as workers’ rights; harmonizing regulations from country to country; and deterring certain potential future trade and investment barriers.
>  
> USMCA would strengthen and add complexity to the rules of origin requirements in the automotive sector by increasing regional value content (RVC) requirements and adding other requirements. USMCA’s requirements are estimated to increase U.S. production of automotive parts and employment in the sector, but also to lead to a small increase in the prices and small decrease in the consumption of vehicles in the United States.
>  
> The agreement would establish commitments to open flows of data, which would positively impact a wide range of industries that rely on international data transfers. USMCA would reduce the scope of the investor-state dispute settlement (ISDS) mechanism, a change that, based on modeling results, would reduce U.S. investment in Mexico and would lead to a small increase in U.S. domestic investment and output in the manufacturing and mining sectors. The agreement, if enforced, would strengthen labor standards and rights, including those related to collective bargaining in Mexico, which would promote higher wages and better labor conditions in that country. New intellectual property rights provisions would increase protections for U.S. firms that rely on intellectual property. These changes are estimated to increase U.S. trade in certain industries.
>  
> The Commission’s model estimates that USMCA would raise U.S. real GDP by $68.2 billion (0.35 percent) and U.S. employment by 176,000 jobs (0.12 percent). The model estimates that USMCA would likely have a positive impact on U.S. trade, both with USMCA partners and with the rest of the world. U.S. exports to Canada and Mexico would increase by $19.1 billion (5.9 percent) and $14.2 billion (6.7 percent), respectively. U.S. imports from Canada and Mexico would increase by $19.1 billion (4.8 percent) and $12.4 billion (3.8 percent), respectively. The model estimates that the agreement would likely have a positive impact on all broad industry sectors within the U.S. economy. Manufacturing would experience the largest percentage gains in output, exports, wages, and employment, while in absolute terms, services would experience the largest gains in output and employment.
> View the publication at: https://www.usitc.gov/publications/332/pub4889.pdf <http://links.govdelivery.com/track?type=click&enid=ZWFzPTEmbWFpbGluZ2lkPTIwMTkwNDE4LjQ5MTUxNDEmbWVzc2FnZWlkPU1EQi1QUkQtQlVMLTIwMTkwNDE4LjQ5MTUxNDEmZGF0YWJhc2VpZD0xMDAxJnNlcmlhbD0xODA4MjcyOCZlbWFpbGlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmdXNlcmlkPWJlbi5iZWFjaHlAc2llcnJhY2x1Yi5vcmcmZmw9JmV4dHJhPU11bHRpdmFyaWF0ZUlkPSYmJg==&&&103&&&https://www.usitc.gov/publications/332/pub4889.pdf?source=govdelivery&utm_medium=email&utm_source=govdelivery>
> 
> 
> 
>  
> Contact: Chris Palmquist, 712-242-6090
> cpalmquist at iatp.org <mailto:cpalmquist at iatp.org>
>  <mailto:cpalmquist at iatp.org>
> April 18, 2019
> FOR IMMEDIATE RELEASE
> 
> USITC REPORT CONFIRMS: NEW NAFTA FAILS CONSUMERS, FARMERS & ENVIRONMENT
> 
> The report shows the need for a NAFTA replacement that fixes the problems created by decades of unfair trade and increasing corporate concentration in food and farming. 
> 
> MINNEAPOLIS—Today, the United States International Trade Commission (ITC) released itseconomic analysis of the impact <http://icm-tracking.meltwater.com/link.php?DynEngagement=true&H=I%2BqMhXDuIS2RujNbavWSOKShOr7Ezi73JeGvxlkJ09Qb0kDpZZQFeJI5e2FCopVdvIge39xMmwSuLhGRT6pQ%2BNqdQwQnP03Xd2HDeRDK3TaV3pq93ZIQEw%3D%3D&G=0&R=https%3A%2F%2Fwww.usitc.gov%2Fpublications%2F332%2Fpub4889.pdf&I=20190418202746.000001b2ef14%40mail6-46-ussnn1&X=MHwxMDQ2NzU4OjVjYjc2ZWExNGZkZjUzZDhjMWY4YjIwMTs%3D&S=AaaMylmZhYQn0owE4HcENtqizH5q_7M2E6moXd2D_Ow> of the United States-Mexico-Canada Agreement (USMCA, or New NAFTA) and concluded that implementation would result in only minor gains for portions of the U.S. economy (in particular, the automobile industry). Not only does New NAFTA fall well short of the economic windfall proponents promised to Americans, it fails consumers, farmers and the environment, said the Institute for Agriculture and Trade Policy <http://icm-tracking.meltwater.com/link.php?DynEngagement=true&H=I%2BqMhXDuIS2RujNbavWSOKShOr7Ezi73JeGvxlkJ09Qb0kDpZZQFeJI5e2FCopVdvIge39xMmwSuLhGRT6pQ%2BNqdQwQnP03Xd2HDeRDK3TaV3pq93ZIQEw%3D%3D&G=0&R=https%3A%2F%2Fwww.iatp.org%2F&I=20190418202746.000001b2ef14%40mail6-46-ussnn1&X=MHwxMDQ2NzU4OjVjYjc2ZWExNGZkZjUzZDhjMWY4YjIwMTs%3D&S=3LGY5h3DH5gu_TDFo9yOP2XHXkWgy_bDG4pwTrQH6fQ> (IATP).
> 
> "If the goal of the New NAFTA is to boost the economy and improve the lives of U.S. residents, the ITC report confirms it fails miserably," said Sharon Anglin Treat <http://icm-tracking.meltwater.com/link.php?DynEngagement=true&H=I%2BqMhXDuIS2RujNbavWSOKShOr7Ezi73JeGvxlkJ09Qb0kDpZZQFeJI5e2FCopVdvIge39xMmwSuLhGRT6pQ%2BNqdQwQnP03Xd2HDeRDK3TaV3pq93ZIQEw%3D%3D&G=0&R=https%3A%2F%2Fwww.iatp.org%2Fabout%2Fstaff%2Fsharon-anglin-treat&I=20190418202746.000001b2ef14%40mail6-46-ussnn1&X=MHwxMDQ2NzU4OjVjYjc2ZWExNGZkZjUzZDhjMWY4YjIwMTs%3D&S=EzBz6TKanr_X83WnT26dhQ_go894LlRa1qmHnUX4_5w>, IATP senior attorney. "The ITC analysis raises the question as to why such time and effort, not to mention over-the-top rhetoric, has been devoted to promoting it."
> 
> During a rushed and secretive renegotiation process for New NAFTA, the concerns and interests of global corporations were given priority over those of farmers, workers, consumers and the environment. Therefore, not only will these transnational businesses continue to benefit—as they have during the 25 years since the original NAFTA was passed—but provisions to "lower trade costs for businesses" will limit future authority of the U.S., Canadian or Mexican governments to protect people and the environment in exchange for minimal economic gains. Tellingly, the economic and societal impact of these weakened public protections are ignored by this cursory report. 
> 
> "New NAFTA isn't just a rhetorical flourish," said Treat. "The agreement is a nearly 2,000 page document with corporate giveaways larded throughout. It would slash consumer protections by limiting food safety oversight and informational labeling, lock in deregulation of the newest genetic modification techniques, and devise new ways to hide health and environmental risk information from the public."
> 
> "The ITC computer model forecasting does not include the likely impacts of non-tariff measures in New NAFTA," said Dr. Steve Suppan <http://icm-tracking.meltwater.com/link.php?DynEngagement=true&H=I%2BqMhXDuIS2RujNbavWSOKShOr7Ezi73JeGvxlkJ09Qb0kDpZZQFeJI5e2FCopVdvIge39xMmwSuLhGRT6pQ%2BNqdQwQnP03Xd2HDeRDK3TaV3pq93ZIQEw%3D%3D&G=0&R=https%3A%2F%2Fwww.iatp.org%2Fabout%2Fstaff%2Fdr-steve-suppan&I=20190418202746.000001b2ef14%40mail6-46-ussnn1&X=MHwxMDQ2NzU4OjVjYjc2ZWExNGZkZjUzZDhjMWY4YjIwMTs%3D&S=k_P0B6cGl47PS3yii64-Vn-Q2s95-q64nBr1e-a53Kg>, IATP senior policy analyst. "New provisions streamline approval of foreign food safety, plant and animal health and animal welfare measures as 'equivalent' despite well-documented evidence they are not. New rules in New NAFTA will lock in a process to further lower U.S. food and agricultural chemical safety standards for decades. Based on the historical record, there is real reason for concern over foodborne illness from imported food and New NAFTA's provisions to enable trade of legally unauthorized products of agricultural biotechnology."
> 
> The original NAFTA hurt farmers and hollowed out rural communities in the United States, Mexico and Canada, and despite claims from President Trump and U.S. Department of Agriculture Secretary Sonny Perdue that New NAFTA is needed to fix the farm economy, the ITC report shows this rhetoric does not match reality. In fact, the New NAFTA will entrench underlying structural issues, exacerbating our ongoing farm crisis, plagued by low prices, rising debt and increased bankruptcies. It locks in a system where global agribusiness firms exploit farmers and extract from rural communities in all three nations.
> 
> New NAFTA's failure to address climate change is both reckless and dangerous. It repeats past mistakes in free trade agreements by fostering deeper North American integration of sectors that emit high quantities of greenhouse gases, such as oil, gas, mining, forestry and agriculture, charting a path forward that will accelerate climate change. 
> 
> The ITC economic impact report, combined with these concerns for consumer, farmer and environmental protections highlight the need for a fresh approach to a free trade agreement that will benefit all people in the United States, Canada and Mexico.
> 
> "The ITC analysis claims that the major win is the commitment to maintain the status quo, especially for new regulations. That is simply not good enough," said Karen Hansen-Kuhn <http://icm-tracking.meltwater.com/link.php?DynEngagement=true&H=I%2BqMhXDuIS2RujNbavWSOKShOr7Ezi73JeGvxlkJ09Qb0kDpZZQFeJI5e2FCopVdvIge39xMmwSuLhGRT6pQ%2BNqdQwQnP03Xd2HDeRDK3TaV3pq93ZIQEw%3D%3D&G=0&R=https%3A%2F%2Fwww.iatp.org%2Fabout%2Fstaff%2Fkaren-hansen-kuhn&I=20190418202746.000001b2ef14%40mail6-46-ussnn1&X=MHwxMDQ2NzU4OjVjYjc2ZWExNGZkZjUzZDhjMWY4YjIwMTs%3D&S=CG7_t5iE17bJFQhRkk-DcYn3kYbnA-KowvNv_2zLrQ0>, IATP director of trade and global governance. "We need a replacement for NAFTA that actually fixes the problems created by decades of unfair trade and increasing corporate concentration in our food system. Instead, we have a business-as-usual approach to the things the ITC can measure, and new tools to limit progress on the things it can't."
> 
> IATP has been studying and tracking NAFTA and its renegotation since before the original NAFTA came into force in 1994. A database of our past and current analyses on NAFTA and New NAFTA can be found here <http://icm-tracking.meltwater.com/link.php?DynEngagement=true&H=I%2BqMhXDuIS2RujNbavWSOKShOr7Ezi73JeGvxlkJ09Qb0kDpZZQFeJI5e2FCopVdvIge39xMmwSuLhGRT6pQ%2BNqdQwQnP03Xd2HDeRDK3TaV3pq93ZIQEw%3D%3D&G=0&R=https%3A%2F%2Fwww.iatp.org%2Fnafta-portal&I=20190418202746.000001b2ef14%40mail6-46-ussnn1&X=MHwxMDQ2NzU4OjVjYjc2ZWExNGZkZjUzZDhjMWY4YjIwMTs%3D&S=nE7QoerKr-Z2ob_aMYjpnFJE24bQMghJAqpJK9BAl_Y>. 
> 
> ##################
> 
> Based in Minneapolis with offices in Washington, D.C., and Berlin, Germany, the Institute for Agriculture and Trade Policy works locally and globally at the intersection of policy and practice to ensure fair and sustainable food, farm and trade systems.
> 
> 
> =================
> 
> FOR IMMEDIATE RELEASE:
> 
> Thursday, April 18, 2019
> 
> Contact: Cindy Carr, cindy.carr at sierraclub.org <mailto:cindy.carr at sierraclub.org>
> View as webpage <https://www.sierraclub.org/press-releases/2019/04/itc-report-ignores-climate-reality-trump-s-nafta>
> ITC Report Ignores Climate Reality Of Trump’s NAFTA
> 
> New report omits critical analysis of NAFTA 2.0’s weak environmental terms
> 
> WASHINGTON, D.C. -- Today, the U.S. International Trade Commission (ITC) released its analysis <https://www.usitc.gov/publications/332/pub4889.pdf> on the economic consequences of Donald Trump’s NAFTA 2.0 trade deal. A review of the report found: 
> 
> The report essentially ignores the economic, environmental, and health ramifications of NAFTA 2.0's weak environmental terms. The environment chapter only gets roughly 1.5 pages of attention in the 375-page report. In those few paragraphs, the report does not mention NAFTA's well-documented track record <http://www3.cec.org/islandora/en/item/11220-hazardous-trade-examination-us-generated-spent-lead-acid-battery-exports-and-en.pdf> of enabling corporations to move production to Mexico to dump their pollution under Mexico’s weaker environmental standards, resulting in U.S. job loss and significant health and environmental costs for border communities. 
> That omission may be because the report authors see NAFTA 2.0's terms as too weak to alter NAFTA's economic track record, which they tacitly suggest. The report states that it's particularly difficult to assess the economic impacts of environmental terms that are "nonbinding." Indeed, NAFTA 2.0’s weak environmental terms are not going to slow down NAFTA’s track record of outsourcing. 
> The report accurately notes that NAFTA 2.0 ignores the climate crisis, stating that the deal is "minimalistic on greenhouse gas emissions and climate change mitigation." But the report fails to assess the economic, health, or environmental impacts of NAFTA 2.0's climate denialism. The report barely makes mention of the massive economic damage that the climate crisis is projected to cause <https://www.latimes.com/science/sciencenow/la-sci-climate-change-costs-billions-20190408-story.html>, and it fails to assess how Trump’s NAFTA 2.0 would contribute to such costly climate change by encouraging fossil fuel trade, facilitating carbon leakage via outsourcing, and empowering oil and gas corporations to challenge climate policies. 
> In response, Sierra Club Living Economy Director Ben Beachy released the following statement:
> 
> "The ITC should have taken a hard look at how Trump’s NAFTA deal would perpetuate NAFTA’s track record of toxic dumping, job outsourcing, and climate pollution, but instead today’s report gives a free pass to the Trump administration’s pro-polluter deal.”
> 
> ###
> 
> To read Ben Beachy’s December 2018 testimony to the U.S. ITC on NAFTA 2.0, click here <https://www.sierraclub.org/sites/www.sierraclub.org/files/uploads-wysiwig/Ben%20Beachy%2C%20Sierra%20Club%20USITC%20testimony.pdf>.
> 
> About the Sierra Club
> 
> The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 3.5 million members and supporters. In addition to protecting every person's right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org <http://www.sierraclub.org/>.
> 
> 
> Arthur Stamoulis
> Citizens Trade Campaign
> (202) 494-8826
> 
> 
> 
> 

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