That's true.
Chair, my remarks draw from my previous experience as a foreign service officer serving on the team that negotiated the Canada-United States Free Trade Agreement and the NAFTA, on my postings in New York, as consul general in Los Angeles, as first head of the advocacy secretariat at our Washington embassy and, more recently, as a member of the trade advisory committee to the deputy minister of international trade.
I encourage members to pass the legislation implementing the Canada-U.S.-Mexico agreement. Trade agreements are like riding a bicycle: Keep cycling and when you hit bumps make adjustments as necessary, but keep cycling. CUSMA is the best possible agreement under the circumstances. It's not perfect, but for Canada it both preserves access to our largest market and preserves the North American platform incorporating Mexico.
The Canada-Mexico story gets scant attention but it's the hidden treasure of the NAFTA story. Mexico is now our third-largest trading partner and, as we witnessed, a valuable partner and ally in recent trade negotiations with the Trump administration with not just the new NAFTA, but in reversing U.S. protectionism through country of origin labelling.
The new agreement is not perfect. lt is freer trade not free trade, but consider where we started. President Trump claimed it was the worst deal ever negotiated. Commerce secretary Wilbur Ross said it was for Mexico and Canada to give, and the United States to get. The Trump administration thought they had us over a barrel because we, Mexico and Canada, were much more dependent on the U.S. than they were on us. We each account for close to 18% of U.S. exports, while for us the U.S. takes almost 75% of our exports. For Mexico, it's about 80%.
Trade generates two-thirds of our GDP, making us the 12th-largest export economy in the world. For the U.S., trade represents just 27% of its GDP. Mr. Trump well understood these asymmetries.
Despite these disadvantages, we updated the NAFTA with new chapters on digital trade, intellectual property, labour and the environment while keeping dispute settlement and supply management. At the same time we managed to drown investor-state provisions. The unjust steel and aluminum tariffs are gone. Our auto trade is managed trade. It's a bit like that of softwood lumber, but we should be able to manage this to support jobs and more investment.
Thanks to the Democrats in the House of Representatives, our gives on patent protection for biologic drugs that would have raised health care costs for provinces were rolled back. The Democrats also secured better enforcement on environmental and labour provisions, all of which we had sought in the negotiations.
ln short, we have a high-quality North American trade agreement, something we sought to obtain through the trans Pacific partnership. lnstead, we now have an up-to-date Canada-U.S.-Mexico agreement with the advantage over the U.S. in trans-Pacific and trans-Atlantic markets through CPTPP and CETA.
This leads me to my recommendations. First, CUSMA is the result of an all-of-Canada effort involving the Prime Minister, ministers, premiers, parliamentarians and legislators, business and labour leaders all working with their American counterparts with complementary messages and purpose. This work must continue and become a permanent campaign. American protectionism is older than the republic, and it will continue no matter who is president. We need trade diversification, yes, but we cannot change geography. That geography gives us access to the biggest and most innovative market in the world.
Working Capitol Hill daily from my embassy, and through my experience at my consulates, I learned that just as all politics is local so is all trade. While we can't make donations to campaigns, we can illustrate the jobs that Canadian trade and investment create by district and by state. We need to keep this data current. Importantly, you as parliamentarians need to keep reminding Americans of these facts, and do this through regular meetings with U.S. legislators—local, state and federal.
There are lots of opportunities, and not just the Canada-U.S. Inter-Parliamentary Group but regional conferences of state and national legislators, important forums like PNWER and NASCO, as well as the sectoral industry and farm group meetings. First, you need to be there to develop relationships and to make the case for Canada. Use your travel points to go to Washington, and I encourage you to adjust the rules for travel throughout the United States. As you will appreciate, nothing is better than a meeting on your home turf.
Second, with the trade agreement in place there is still unfinished business when it comes to regulation and infrastructure. The thicket of national, provincial and local regulations and standards needs to be harmonized or made complementary. CUSMA helps, but we're also working on, through separate initiatives launched by the Harper government and Obama administration, regulatory co-operation and beyond the border. These have been continued by the Trudeau government and the Trump administration. They continue, but after the initial burst of enthusiasm, I'm afraid they're now buried within our bureaucracies. Progress requires political oversight by this committee, including hearings to identify the roadblocks, raise consciousness and keep government noses to the grindstone. Your constituents will thank you.
People and trade pass through our border points, as well as roads, rail, hydro and pipelines, bridges and tunnels, airports and rail stations. They need improvement. Too often they are choke points that hamper passage and productivity. Canada has an infrastructure program, but is it moving fast enough? This should be an area of close collaboration by all levels of government. Again, parliamentary oversight of the progress is essential. The U.S. administration and Congress are already talking about a trillion-dollar infrastructure program. We need to ensure it is complementary to our efforts, and because procurement is not part of CUSMA, leave it to governors and premiers to work out a procurement agreement as we did in 2010.
Harvard's Belfer Center points out that North America is the next great emerging market, possessing abundant energy, a skilled workforce, technology and a big market. However, we need infrastructure.
Meanwhile, we enjoy first-mover advantage of the U.S. with the European Union and CPTPP nations, but only if we seize these opportunities. Our competitiveness depends on our ability to get goods quickly to market, whether in North America or across our oceans.
Third, we need to know more about North America, especially the United States. Diversification is a laudable goal, but for Canada, when it comes to trade and security, it will always be the United States and then the rest. Anyone in business will tell you market intelligence is essential, whether you are buying or selling. For example, how many of you can tell your constituents how many of their jobs depend on U.S. investment and trade? We can do it for the U.S., and the Business Council of Canada has created an interactive map that can pinpoint jobs by congressional district and state. Why don't we have one for Canadian constituencies, and why not include TPP and CETA? People understand why trade matters to them.
Given our propinquity and innate understanding of the United States, why aren't we turning this to our advantage? How many serious centres for the study of the U.S. are there in Canada? How many Canada research chairs focus on the United States and our trade? You will be disappointed in the answer.
I encourage you as parliamentarians to pass CUSMA. I encourage you to press for investments that serve our national interest.
In conclusion, we always need to keep in mind that Canada's influence in the world is measured to a large extent by our understanding of the United States. By using our knowledge and relationships with Americans, our ability to leverage our influence in Washington and state capitals makes us a more desirable partner with the rest of the world, because they also have to do business with our often-complicated neighbour.
Thank you, Chair.
