WASHINGTON (Reuters) - The Business Roundtable, a trade group of top U.S. chief executives, announced Wednesday its members backed the revised U.S.-Mexico-Canada (USMCA) trade deal after negotiators brought the hard-won agreement across the finishing line.
Top officials of the three countries signed the overhaul of the 1994 North American Free Trade Agreement (NAFTA), which labor unions, industry groups, lawmakers and even environmental groups fought hard to improve, on Tuesday.
“Business Roundtable urges swift passage of USMCA implementing legislation because the agreement in its totality preserves and strengthens North American trade and investment,” said Joshua Bolten, the group’s president and CEO.
“We will work with Congress and the administration to get this done.”
Ahead of fresh U.S. tariffs on Chinese imports that are due to kick in at the end of the week, group chairman Jamie Dimon, chief executive at JPMorgan, said he expected phase-one talks of a trade deal between Washington and Beijing to be finalized, adding that not doing so would be “negative” for markets.
During the group’s quarterly meeting in Washington, Dimon added that recent interest rate cuts by the Federal Reserve help the economy “a little bit” but “not as much as people expect.”
His comments came as the group’s quarterly survey found CEO sentiment dropped for the seventh quarter in a row, as executives said ongoing trade uncertainty and the global economic slowdown were tempering their plans.
Speaking with reporters, Dimon again pushed the central bank to reconsider its liquidity rules for banks after rates spiked in overnight funding markets this fall. He warned the issues seen in the “repo” market could spill over into other financial markets in a weaker economy.
“They should look at recalibrating all the rules and regulations that do affect the liquidity in the market. This is a minor one, the repo market. But it would affect other markets, and it could, that wouldn’t be so minor,” he said.
The Fed has so far resisted industry calls to reconsider its rules, with top officials saying the rate spikes were primarily due to technical factors.
However, Fed Vice Chairman Randal Quarles is reviewing how its supervisors monitor banks, and whether their interactions may have pushed banks to steer clear of the overnight markets, which underpin much of the U.S. financial system, by helping banks meet daily liquidity needs.
Dimon said the Fed’s current policy of providing temporary support to the market is insufficient.
“I don’t think they’ve fixed it so much as put a Band-Aid on it every day,” he said. “But they’re aware of it.”
Reporting by Pete Schroeder; Writing by Katanga Johnson, Chizu Nomiyama and Nick Macfie