Oklahoma U.S. Senator James Lankford made a stop in Grove last week and told members of the Grove Rotary Club that Oklahoma will see many benefits from a proposed replacement for the NAFTA trade agreement.
Lankford noted that Mexico and Canada now are the United States largest trading partners as a result of the agreement between the three countries that took effect in 1994. It resulted in the reduction and elimination of some trade barriers and investment among the three countries.
Lankford noted the agreement needed to be updated partly because eCommerce has exploded during the intervening years. In the fall of 2018, the three countries agreed to replace the agreement and Lankford says it will be called the USMCA agreement (United States-Mexico-Canada Agreement).
The U.S. House of Representatives should begin considering the new bill in the near future and, once approved, the Senate will also consider the measure before it goes to President Trump.
"Logistically with Oklahoma in the center of the country and on the I-35 corridor, this is a big deal." He said it should spur economic development in the state.
He pointed out one benefit for Oklahoma agriculture will be wheat exports to Canada. “Canada will no longer be able to label Oklahoma wheat as “livestock grade” which will increase profits for wheat farmers.” In addition, Oklahoma exports many pork products to Mexico. Tariffs on pork products have been subjected to a high tariff. Under the new agreement, those will be reduced and stabilized.
Drug and Health Care Costs
As a member of the Finance Committee, Lankford is involved with hearings on rising drug and health care costs. The committee is looking in-depth at the practices of pharmaceutical companies and how they set prices.
He said the committee promoted new legislation that ended the practice of pharmaceutical benefit managers prohibiting pharmacists from telling a consumer that a drug bought for cash may cost less than using the consumer's insurance. That was signed into law by President Trump.
In addition, he said pharmaceutical benefit manager groups give kickbacks or rebates to ensure that a generic drug is placed on the same tier group as the branded product. This results in the generic drug costing the same as the branded drug. They also attempt to limit the distribution of the generic.
Proposed legislation would prohibit this practice so that consumers would pay much less for the generic than the branded product.
He also addressed "surprise billing." He noted that even when consumers use a facility that is in-network, they may find that certain services in a hospital are not covered under the network pricing. He gave the example of an MRI that may cost as much as $20,000 even though it is in the same facility that is in-network. There is legislation being considered that would not allow this to happen.
He also spoke about an Oklahoma City hospital called the Surgery Center which is owned and operated by approximately 40 doctors. The hospital posts an inclusive price for its operations. Lankford told the group that the administration is looking at rules changes that have the possibility of requiring all hospitals to post costs as a way for consumers to compare services.
Taxes and the Deficit
Lankford pointed out that taxes bring in about $3.2 trillion a year to the federal government, but the federal budget is about $4 trillion per year. He said he supports taxes for things that the country needs to do together such as infrastructure but supports private growth over federal spending to spur the economy. He noted that despite the corporate tax cut in 2018 that individual tax receipts were up 7 percent while corporate tax receipts were up 30 percent. He noted that the largest companies should have to pay taxes and the laws should make it advantageous for companies with international operations to return profit earned back to the United States.
Chinese Trade Issues
He also addressed China Trade issues. He noted that China steals American copyrights and patents and uses them to compete with American companies. He said, "China's economy is tanking. Many of the manufacturers located in China are looking for new places to move their plants."
He says that the United States and China are in discussions over 100 "problems" and have come to an agreement on 75 of them. "It is the last 25 which are the biggest problem."
He spoke about China's Human Rights abuses noting that not only do Chinese citizens have a financial score, they also have a social score. "If that score is too low, their kids can't go to school, they can't travel, and they can't get a job.
The one billion people deserve better." He said that protestors in Hong Kong may face the loss of democracy since that have "pushed too far."