ICYMI | The Washington Times — USTR’s last-minute effort to neuter Trump’s USMCA

'America's government must protect American interests…the outgoing Biden administration must abandon this disastrous trade proposal. Failure to do so will create an enduring legacy of emboldening foreign governments to exploit American businesses and creating serious economic and national security vulnerabilities for the homeland.'

USTR's last-minute effort to neuter Trump's USMCA
By: Senators Bill Hagerty, Katie Britt and Tommy Tuberville
January 13, 2025
Link here.

The Biden administration jeopardizes American national and economic security

In its waning hours, the Biden administration is working overtime to remind Americans why they voted for President-elect Donald Trump, whether it's pardons of heinous criminals or destructive American energy restrictions.

One of the most harmful yet underreported measures is an effort by U.S. Trade Representative (USTR) Katherine Tai to lock in before Jan. 20 a difficult-to-reverse trade proposal that would (1) Reward Mexico's government for violating the legal rights of American companies while (2) Jeopardizing construction of U.S. roads and bridges and (3) Potentially handing a key strategic port in the Gulf of Mexico to the Chinese Communist Party or other bad actors.

This appalling surrender of U.S. interests must be halted.

Specifically, the Biden administration wants to finalize a new binding re-interpretation of our trade agreement with Canada and Mexico that would snuff out U.S. companies' ongoing trade claims regarding unlawful actions by foreign governments.

Consider the impact on the case of Vulcan Materials, an Alabama-based company that has supplied crushed limestone-specifically available near its deep-water port on the Yucatan Peninsula-for decades to build infrastructure from Texas to Florida and the Carolinas.

Yet since 2018, the Mexican government led by President Andrés Manuel López Obrador and, more recently, President Claudia Sheinbaum, has escalated an unlawful campaign to shut down Vulcan's operations and seize its property, including the firm's strategically located deep-water port. Mexico has asserted shifting pretextual claims for this action, but it's ultimately about taking control of Vulcan's property.

Vulcan rightly brought trade arbitration claims against Mexico under the Investor-State Dispute Settlement (ISDS) provisions of the North American Free Trade Agreement (NAFTA) and its successor United States-Mexico-Canada Agreement (USMCA). It is on the cusp of potentially being awarded substantial compensation. However, USTR's last-minute effort to neuter the USMCA's Annex 14-C would eliminate the heart of Vulcan's case against Mexico.

Even serious trade thinkers on the right with misgivings about ISDS recognize that there are instances where it advances American interests. They certainly wouldn't support an agreement that changes the rules, ex post facto, to support another nation's effort to vitiate an American company's justified legal claim.

It's bad enough that the Biden administration is siding with a foreign government that is bullying American businesses. More profoundly, however, this measure would jeopardize American national and economic security.

Vulcan's port-the only deep-water port on the Yucatan Peninsula-is a key access point to the Gulf of Mexico and ports throughout the southern U.S. Its strategic importance is enormous.

Losing control of this port-the only one in the region capable of accommodating the large vessels needed to efficiently transport essential construction materials to the U.S.-and the nearby limestone quarry would imperil thousands of connected American jobs in construction, shipping, and related industries and hamstring the construction of roads, bridges, and other infrastructure in America.

It also raises the question of who could gain access to or control of this port after Mexico's seizure.

Over the past decade, CCP General Secretary Xi Jinping's Belt and Road Initiative has prioritized the acquisition of geopolitically significant ports-ostensibly for commercial purposes but often for dual commercial and military use. China now owns or operates nearly 100 ports in over 50 countries, especially in locations with critical trade or strategic value. China's involvement in ports on either side of the Panama Canal-a vital artery for global trade-highlights its ambitions.

The CCP, no doubt, has its sights set on this Yucatan port if American control is extinguished.

Beyond these military and strategic considerations, the Justice Department recently indicted Chinese companies for supplying fentanyl precursors to criminal elements in Mexico. At a time when deadly fentanyl is killing over 70,000 Americans each year, facilitating CCP ambitions in America's backyard could have catastrophic consequences for American communities.

America's government must protect American interests. Congress should pass the Defending American Property Abroad Act to prohibit vessels that utilize expropriated U.S. infrastructure from entering American ports, thereby discouraging trade partners from taking advantage of us.

However, the outgoing Biden administration must abandon this disastrous trade proposal. Failure to do so will create an enduring legacy of emboldening foreign governments to exploit American businesses and creating serious economic and national security vulnerabilities for the homeland.

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