Introduced by Joyce Waugh, President and CEO, Roanoke Regional Chamber.
Thank you, Joyce, for the kind introduction.Thank you all for being here today.
And a special thank you to Bill Fanjoy and your team at the U.S. Export Assistance Center of Virginia for all you do for the business community in this region of the country.
But before I discuss the immense significance of USMCA here today, I wanted to briefly touch on another topic.
The Roanoke Times this morning posed four questions for me in its Editorial Page. I plan to submit a written editorial response, but will do so orally now.
Question 1: How to reverse the great divergence between large cities and rural communities -- To reverse this trend, several things are needed. First the business community needs to work with Virginia Tech, Radford, Liberty, Jefferson College, and other Virginia schools to develop the skills needed for today’s world. Many rural areas in North and South Carolina have done this as well.
Second, to attract large employers, large tracks of land must be made available on favorable terms.
Third is broadband access. The FirstNet joint venture between the Commerce Department and AT&T will bring to this region a broadband 911 service, some of the backbone for this will be usable for 5G.
Question 2: How to reverse the concentration of venture capital in large cities -- The Trump Administration created opportunity zones with favorable tax incentives. In fact, there are 212 alone in Virginia and five of those are in the Roanoke region.
Question 3: How to build the skill level of rural workforce -- Skill level raising is a major objective of the National Council for the American Worker. We have received hundreds of companies to commit to 9.9 million apprenticeships. Additionally, our American Workforce Advisory Board is meeting next week.
Question 4: Should the Federal government intervene to aid rural economies -- The best way to help rural economies is to reverse the flow of jobs offshore. That is what killed the furniture industry in this region. USMCA is a good start.
Now onto the main focus for my visit.
On behalf of President Trump, I am delighted to discuss the virtues of the United States-Mexico-Canada Agreement and what it means to businesses and the export community here in Roanoke and the surrounding region.
I see that the Roanoke Regional Chamber of Commerce has endorsed the agreement, and has urged Congress to ratify the pact. Thank you for that support.
But before I talk about USMCA, let me mention that the Virginia economy is really turning around.
Not long ago, there was a great deal of concern, as hundreds of manufacturers closed their Virginia operations and shifted production offshore.
What has destroyed manufacturing in areas like Roanoke has been unfair, subsidized, foreign competition. China, Indonesia, and other nations have ruined industries like furniture. The Chinese factories have gotten so large that they don’t even bother with custom features like decorative chair legs.
Until President Clinton admitted China to the WTO, their growth was slow but since it increased sharply. His theory was that they would play by the rules, but he had not imposed a way to force the rules, so they ignored them.
With Mexico pre-NAFTA, we had an annual trade surplus of around $5 billion, but since that trade agreement was instituted, our trade deficit ballooned and key industries were shuttered.
Thankfully, we have entered a new era of economic growth, and we are working on bringing the factories back to America.
President Trump is doing this by implementing a coordinated set of pro-business economic policies. We’ve cut unnecessary regulations that discourage and delay investment in new plants and equipment.
After decades of discussion, we have finally instituted a globally competitive corporate tax code.
We are committed to training a new generation of skilled workers.
Already, 217 employers throughout the country have signed the President’s Pledge to America’s Workers, committing to provide education, training opportunities, and apprenticeships to 9.9 million American workers over the next five years.
And we have finally gotten tough on our trading partners who refuse to abide by the global rules of trade.
We are no longer allowing them to target our industries; and dump government-subsidized products into our markets.
The results of our “America First” economic policies have been impressive.
Since Election Day, nearly 6 million new jobs have been created, and the unemployment rate of 3.6 percent is the lowest its been in 50 years.
Virginia’s unemployment rate ranks ninth best in the country of all 50 states, at an astoundingly low rate of only 2.9 percent.
In Roanoke, it’s even better: 2.5 percent, with almost 163,000 people employed.
Amazon’s decision to locate its HQ-2 in Northern Virginia will bring more than 25,000 new jobs to Virginia.
That is a big win not just for Northern Virginia, but the entire state of Virginia.
It will broaden the tax base, and create many new opportunities for the young, talented technology students in Roanoke and the surrounding region.
The Amazon announcement has another important effect on this region, since mighty Virginia Tech — down the road in Blacksburg — just announced plans to build a new, $1 billion, high-tech campus right next door to Amazon, in Arlington.
The Hokies are a major generator of jobs and wealth in Virginia, and this will further increase the stature of Tech, the state, and this entire region.
And, unlike the last administration when 200,000 manufacturing jobs were lost, companies across the nation have created almost 500,000 good-paying jobs in factories since the President was elected.
Virginia’s 5,000-plus manufacturers employ almost a quarter-of-a-million workers, making an average of $70,244 a year in 2017.
Virginia manufacturers contributed $44.31 billion to the state’s economy. And the products they manufacture account for more than 80 percent of the state’s exports to global markets.
Virginia’s high-tech manufacturing sector is adding a lot of jobs.
Last year in Virginia, jobs in the aerospace products and parts manufacturing sector grew by 20 percent.
Jobs making control instruments, electromedical products, and navigational and measuring devices grew by 10 percent, in one year.
A big part of the President’s economic growth strategy is rebalancing trade.
We are doing this by negotiating trade agreements that benefit American producers and their workers.
The new U.S.-Mexico-Canada Agreement is the largest trade deal in American history.
It directly attacks the colossal $81.5-billion trade deficit in goods the United States has with Mexico, and the $19.7 billion trade deficit in goods with Canada. And it will be a big win for companies, farmers, and workers throughout Virginia.
Most people don’t know what is in the deal, but the details — and their implications for American companies — are stunning.
USMCA eliminates many practices and trade barriers that have long hindered U.S.-companies’ access to the Mexican and Canadian markets.
There are important new chapters on Digital Trade; IPR Protection; Anticorruption; Small and Medium-Sized Enterprises; Currency Manipulation; State-Owned Enterprises; and Good Regulatory Practices.
The new chapter on digital trade includes rules that allow data to be transferred freely across borders, and prohibits protectionist limits on the location of data storage and processing. This is a big win for U.S. companies that operate internationally.
The new chapter on Intellectual Property includes tough enforcement provisions against counterfeiting and piracy.
There are new tools for customs officials to use to impede the flow of counterfeit goods and fakes through our borders. This is especially important for the furniture and household goods industries.
USMCA establishes 10 years of data protection for both biologics and agricultural chemical products, giving American innovators 10 years of market protection against third parties.
The new trade agreement promotes export growth by reducing the costs of cross-border transactions.
It allows traders to submit and receive customs-related documentation and data through one website in each country.
Once customs requirements are met, goods must be released immediately, thereby cutting the red tape that currently delays shipments.
Canada and Mexico will be required to publish information on all fees and penalties they assess on products imported from the United States.
This will allow American companies to better predict trade-related costs before they export.
Express shipments valued below $2,500 will benefit from reduced paperwork requirements, making low-value shipments easier, faster, and less costly for traders.
Along these lines, both Canada and Mexico increased their de-minimis shipment-value levels, allowing lower-value packages to enter their countries from the United States without having to pay taxes and tariffs, and with simplified customs forms.
USMCA ends Canada’s barriers to U.S. exports of agricultural products.
It ends the unfair conditions that put U.S. workers in competition with low-wage, low-standard labor by including fully enforceable labor and environmental obligations.
It requires that 40 to 45 percent of automotive content be made by workers earning an average base wage of at least $16 an hour.
This will ensure that the U.S. gets its fair share of the additional production volume.
For the first time, we have a trade agreement that addresses unfair currency practices that put U.S. producers at a competitive disadvantage.
The undervaluation of currency is an issue that has been talked about since the early 2000s, and we are finally doing something about it.
Importantly, the USMCA updates the rules-of-origin for automobiles by requiring that 75 percent of the content of vehicles be produced in North America.
This provision alone should create tens of thousands of new jobs in the U.S. automotive sector.
New rules-of-origin apply to other industrial products as well, increasing the regional content of chemicals, steel-intensive products, titanium, glass, and optical fiber. These new rules will ensure that only producers who use sufficient amounts of U.S.- or regionally made parts or materials receive preferential tariff benefits.
USMCA has separate annexes dealing with regulatory cooperation in important sectors, including chemicals, pharmaceuticals, medical devices, information and communications technologies, and cosmetics.
All of these provisions are new.
They have never been part of any U.S. trade agreement before.
We will be using them as a starting point for deals with countries in Asia, Africa, Europe and elsewhere.
We negotiated USMCA with the intent of preserving Mexico and Canada as the largest export markets for U.S. products.
In fact, for 46 of the 50 U.S. states, the top two export markets include Canada or Mexico.
Last year, $1.3 trillion of goods flowed among the three countries, supporting close to 3 million U.S. jobs.
In Virginia alone, exports to Mexico and Canada totaled $4.3 billion last year.
Canada and Mexico are Virginia’s first and third largest trading partners, respectively, and they account for 23 percent of Virginia’s exports to the world.
Virginia’s top export sectors include transportation equipment; defense; cyber security; chemicals and; machinery.
They support thousands of jobs across the state.
- There are 38,703 Virginia workers in the transportation equipment sector, including motor vehicle and aerospace industries;
- There are 15,000 defense contractors, more than in any other state;
- There are 19,500 high-tech companies located in Virginia, employing more cybersecurity experts than in any other state;
- There are 14,011 workers in the chemicals sector; and 14,424 workers in the machinery manufacturing sector.
In 2016, 74,434 jobs were supported by goods exported from Virginia to the world.
And 85 percent of U.S. exporters in the state of Virginia are small- and medium-sized companies.
Virginia is home to many of the world’s most iconic multinational companies that make products that touch our everyday lives, such as Mars,
General Dynamics, Ford, Eastman, Dupont, Honeywell, and Phoenix Packaging.
Major foreign companies have also set up their U.S. headquarters in Virginia, including Airbus, Rolls Royce, BAE Systems, and Intelsat. So, the Virginia economy is dynamic, has momentum, and is well positioned to take advantage of the new opportunities that USMCA presents.
Given your location in the country, Roanoke is an excellent place from which to export. This city is the center of one of Virginia's largest metropolitan regions, and a hub of transportation, finance, and industry for the southwestern part of the state.The downtown has been reborn, and beautifully restored, thanks to the energy and devotion of the people living here.It offers a tremendously high quality of life, and beautiful, affordable housing. USMCA can further strengthen this revitalization.
The U.S. Trade Representative made the requisite filing of the trade agreement with Canada and Mexico with the House of Representatives on May 30th. Prime Minister Justin Trudeau introduced a bill in Canada’s House of Commons on May 29th to implement the USMCA.And President Lopez Obrador sent the Agreement to the Mexican Senate on May 30th. In the U.S. Congress, we are hoping to get broad bi-partisan support to ratify the USMCA this summer. It is truly a great deal for American companies, workers, farmers and ranchers.
I look forward to working with you to see the USMCA signed, sealed, and delivered.
Thank you, and I look forward to your questions.