Manufacturing is critical to our state and national economies. From farm and construction equipment to medical devices and wind turbines, Iowans have brought innovation and ingenuity to America’s manufacturing industry.
Advancements in technology and processes have transformed manufacturing. However, what hasn’t changed is its importance — or the United States being a leader in this area. American factories produce double what they did in 1986, and American manufacturing is a top export industry that employs more than 12 million workers. Over 220,000 of these workers are fellow Iowans.
These workers rely on exports, which have quadrupled since 1990. Indeed, nearly half of all U.S. manufacturing output is now exported. Accordingly, it is vital that we improve access to our customers in foreign markets. In particular, U.S. manufacturers need access to the Canadian and Mexican markets, which are by far our largest markets for manufactured goods. Trade with these two countries alone supports approximately 2 million American manufacturing jobs.
Our trade relationships with Canada and Mexico are critical to the success of Iowa’s economy. The state exported nearly $12 billion of manufactured products last year. More than $3 billion of Iowa’s manufactured products went to Canada; more than $1 billion to Mexico. Further, more than 25,000 Iowa manufacturing jobs are tied to exports to Canada and Mexico.
To preserve and improve the important trade relationship between the U.S., Canada and Mexico, Congress needs to pass the United States-Mexico-Canada Agreement (USMCA) without delay.
USMCA will preserve duty-free trade with Canada and Mexico, which is hugely important for American manufacturers that have built valuable supply chains in North American. USMCA also establishes stronger enforcement tools to verify origin, which will ensure that only manufacturers using significant North American content will receive the benefit of preferential treatment.
Though not as renowned for auto production as it is for other industries, Iowa manufactures nearly $1.6 billion worth of transportation equipment, which includes auto parts. USMCA requires 75 percent of auto content to be made in North America, a significant leap from 62.5 percent under the North American Free Trade Agreement (NAFTA).
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According to the National Association of Manufacturers, Iowa’s agriculture, construction and mining machinery exports to Canada and Mexico increased by more than 50 percent over the past decade. Additionally, Iowa’s motor vehicle bodies and trailers exports to the same countries increased by more than 70 percent over the last 10 years.
Passage of USMCA is necessary to keep Iowa’s manufacturing industry strong and growing. It’s also vital for many other important industries in our state, including dairy and pork.
I will continue to advocate for USMCA and to work with my colleagues to promote its swift passage. I’m optimistic that its economic benefits will outweigh any competing political interests, and that members of Congress will be able to deliver to the American people.
• Chuck Grassley is a Republican U.S. senator from Iowa.