Devil is in the details with regard to new trade accord

There is a question just about every Mahoning Valley resident is asking: Could the new trade agreement encompassing the United States, Mexico and Canada be the savior of General Motors’ Lordstown assembly complex?

The answer is as elusive as GM’s chief executive officer, Mary Barra, who will not give any indication of what lies ahead for the 52-year-plant. Indeed, Barra’s refusal to come clean, even to Ohio’s two senators, Democrat Sherrod Brown and Republican Rob Portman, is fueling the anxiety of Valley residents.

Thus, when President Donald J. Trump announced that the new United States-Mexico-Canada Agreement would turbocharge the domestic automobile industry, the Valley breathed a sign of relief.

However, we would caution against any premature celebration because the devil is in the details of what the North American Free Trade Agreement – 2.0 – contains.

NAFTA, which is 24 years old, tore down trade barriers among the three countries. But the trade pact also encouraged American factories to move to Mexico to take advantage of low-wage labor.

During the 2016 election, Republican Trump, who won the party nomination against all odds, made the dismantling of NAFTA a top campaign promise. The pledge struck a chord in old manufacturing regions like the Valley, which have experienced firsthand the economic dislocation that comes with jobs being sent overseas.

As Congressman Tim Ryan of Howland, D-13th, put it, “NAFTA has hurt millions of American workers, devastated communities and wiped out our manufacturing base. Nowhere is that more evident in Northeast Ohio. That’s why I’ve been fighting to replace NAFTA with a fair deal since I was first elected to Congress. I am pleased that the text of the renegotiated NAFTA makes great strides toward prioritizing workers.”

Ryan and other Democrats in Congress have found common cause with the Republican president on the issue of trade.

Trade barriers

By contrast, Republicans in Congress have generally supported NAFTA for the past two decades and are of the opinion that the agreement reduced most trade barriers in North America, leading to a surge in trade between the three countries.

But Trump and Democrats share the belief that NAFTA encouraged American manufacturers to move jobs south of the border to take advantage of much lower wages.

During the 2016 election, the GOP nominee for president came to the Valley and pledged to set aside the North American Free Trade Agreement and negotiate a new pact that serves to put America’s interests first.

The U.S. and Mexico initially reached agreement, and then this week Canada came on board just hours before a deadline set by Trump.

The president wasted little time in declaring victory. He contended that the accord would return the United States to a “manufacturing powerhouse.”

But Canadian Prime Minister Justin Trudeau, who has clashed with Trump on a number of issues, said the new pact would be good for his country.

“We got the right deal,” Trudeau said. “We got a win-win-win for all three countries.”

While the president warned that Democrats may attempt to scuttle the USMCA because of the fall congressional elections and their hope of regaining majorities in the House and Senate, Republican support certainly isn’t a given.

Congress has the responsibility to go over the agreement and the side letters with a fine-tooth comb. It would be foolhardy for lawmakers to rubberstamp the pact just because Trump wants it ratified before the midterm elections.

There are many questions that need to be answered, foremost of which has to do with auto manufacturing. Will NAFTA 2.0 result in American carmakers closing plants in Mexico and bringing the jobs back to the U.S.?

More to the point, is there anything in the agreement that would give GM the incentive to invest in upgrading the Lordstown assembly complex, including expanding the paint shop, so the compact Chevrolet Cruze can be replaced with a truck, SUV or crossover model?

The Valley will be watching with interest as Congress reviews the United States-Mexico-Canada agreement.