Trump's North America Trade Deal Will Give U.S. Companies Confidence in Uncertain Times | Opinion

American businesses face enormous challenges right now. The ebb and flow of the trade war with China is roiling supply chains. A simmering tariff war with the European Union could soon boil over. And there is now even greater instability in the Middle East, unleashed by President Donald Trump's sudden decision to withdraw U.S. forces from Syria and give Turkish President Recep Tayyip Erdogan a green light to attack Kurdish forces with whom we had been allied.

This swirl of uncertainty is threatening to hold back U.S. economic growth and has lowered global forecasts. More than six in 10 CEOs say trade disputes have hurt their businesses. Many have shelved expansion plans as they adopt a "wait and see" approach. In September, the widely watched ISM manufacturing index contracted for the second month in a row, registering its worst level since 2009. Service industries have barely expanded.

Congress doesn't have the power to resolve trade disputes with China or the EU or turn back the clock on Syria. But there are steps that lawmakers can take in the coming months to offer greater certainty to businesses—including by approving the United States-Mexico-Canada Agreement (USMCA). The deal would give American companies a higher level of confidence that at least trade with Canada and Mexico will not be disrupted.

USMCA would replace NAFTA, the free trade agreement implemented in 1994. As former acting and deputy U.S. trade representative under President Barack Obama, I saw firsthand how NAFTA boosted the economies of all three countries. Today, Mexico and Canada are our two largest trading partners. U.S. businesses sold more than $650 billion worth of goods and services to Canada and Mexico last year alone. This trilateral trade supports over 12 million U.S. jobs.

But NAFTA hasn't kept pace with the digital revolution or other important issues we now seek to cover in U.S. trade agreements. When that deal was negotiated in the early 1990s, e-commerce barely existed. Most people didn't own computers or cell phones, and Amazon was just a small bookstore operating out of Jeff Bezos' garage.

USMCA takes NAFTA's basic framework and modernizes it for the 21st century.

USMCA, for example, establishes a comprehensive set of intellectual property protections for technology. The deal bans trading partners from imposing customs duties on videos, e-books, games, apps and music. It lengthens copyright terms for these digital products. And it eliminates requirements that data be stored locally. It also lengthens intellectual property protections for "biologic" medicines, a class of advanced drugs that barely existed in the early 1990s and has led now to breakthrough treatments for patients.

Such provisions will help American companies—large and small—expand their business with Canada and Mexico, as well as make the standards among all three countries more uniform.

USMCA's emphasis on intellectual property reflects the reality of today's economy. IP-intensive industries already support over 45 million American jobs, account for 52 percent of U.S. exports and contribute $6.6 trillion to the U.S. GDP.

Businesses across the country—not just in the states that border Mexico and Canada—would reap the benefits of updating NAFTA. Mexico and Canada rank as the first and second-largest foreign purchasers of U.S. goods in 46 states. U.S. small and medium-sized businesses count them as their top two export markets.

This is the case in states like California and Colorado, where a large percentage of tech startups call home. It is also true in North Carolina, New Jersey, Pennsylvania and Massachusetts, where local economies depend on biopharmaceutical innovation. Firms in those states export billions of dollars of goods and services—ranging from software to medicines—to Canada and Mexico every year.

House Speaker Nancy Pelosi has not yet scheduled a vote on the pact but has signaled that the House is on "a path to yes." Her team and the administration are working to address several issues, including ensuring strong, workable enforcement provisions in a number of areas.

USMCA is not perfect, but no deal ever is. But USMCA is worth passing. Not only would it cement our extremely close trading relationships with Canada and Mexico, but it would also offer U.S. businesses more certainty in a tumultuous time.

Ambassador Miriam Sapiro is a senior adviser to the Pass USMCA Coalition, a group of trade associations and businesses advocating for the passage of the United States-Mexico-Canada Agreement, and served as acting and deputy U.S. trade representative during the Obama administration.

The views expressed in this article are the writer's own.