Dr. Jansen Interviewed on the Impact of the USMCA
Jan 30, 2020
Summary: In a recent interview on KBTX news, Director Dennis Jansen spoke on the impact of the new United States-Mexica-Canada Agreement (USMCA), which replaced NAFTA, on manufacturing jobs, as well as the automotive and dairy industries.
“These claims are that we have lost millions of jobs from NAFTA- it’s hard to run down the source of all these things. We lost about 2.6 million jobs in the 14 years before NAFTA in manufacturing and the trend continued after NAFTA was signed. If you blame all of the trade gap with Mexico on NAFTA—which I think is a big ‘if’—if you do that, you would say something like 150,000 jobs disappeared—and I don’t want to give that credence. But 150,000 jobs? That’s what happens every month in the U.S.” Jansen said.
As part of the Agreement, 40-45% of a vehicle’s content must be made by workers earning at least $16 per hour. Since most workers in both the U.S. and Canada already earn wages at or above this level, coupled with the new content requirement, proponents claim that auto manufacturing jobs will move back to the U.S. from Mexico.
“There’s two effects here: you might get – although, I don’t see this happening – a tiny movement of manufacturing jobs back to the U.S., but what I think you are just as likely to see is lost sales due to higher prices” said Jansen.
The interview also touched on another feature of the USMA – Canada’s loosening of the restrictions on dairy products imported from the U.S. On whether this will help Texas dairy farmers, Jansen said “It’s going to help a little bit. Canada has eased its quota and will allow in about $560 million of U.S. dairy products.”
The interview was shown on Monday, January 20, 2020. Click here to view the video clip from KBTX