Pandemic Negates Potential USMCA Trade Advance

By Heather van Blokland
Published: Monday, June 22, 2020 - 5:05am
Updated: Monday, June 22, 2020 - 10:11am

The United States-Mexico-Canada Agreement goes into effect July 1, promising to boost business as the economy struggles to bounce back from COVID-19, but manufacturing losses may not be recoverable. Logistics and transportation companies are at the forefront of the continental crisis as supply chains were already slowing before the outbreak.  

"I give all three governments massive A-plusses for getting the closing of a border down, right, for the business of trade to continue," said Glenn Williamson is the CEO of the Canada Arizona Business Council. “So, why the heck is trade down 30 or 40%? It’s not the borders. People would like to blame the borders. They’d like to blame the governments. But the pandemic has created something much larger than that,” he said.

What’s larger is the underlying processes now broken as different factories around the globe implement different COVID-19 rules and mandates for safety, removing the homogenization that has historically made supply chains work.

"These supply chains are now broken because of different rules and regulations on COVID-19 in different countries which then effect different factories differently," he said.

U.S. Trade Representative Robert Lighthizer testified before Congress this week, saying that using offshore sites for manufacturing is a thing of the past. In his testimony, Lighthizer praised several companies that stopped offshoring efforts or have announced plans to move production to the U.S.

According to recent data, the U.S. has lost more than 91,000 manufacturing plants and nearly 5 million manufacturing jobs since 1997, including nearly 1,800 factories that disappeared under Trump between 2016 and 2018.

Any recent manufacturing gains were abruptly wiped out by the COVID-19 lockdown — with a staggering 1.2 million manufacturing jobs lost this year.

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