2293_sejda-DYJ.pdf - U.S-Mexico-Canada Trade Agreement...

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Unformatted text preview: U.S.-Mexico-Canada Trade Agreement Table J.2 U.S. foreign affiliate sales in Mexico, 2016 Agriculture, forestry, fishing and hunting Other mining Oil and gas extraction Food manufacturing Beverages and tobacco products Textiles, apparel, and leather products Wood products Printing and related support activities Petroleum and coal products Chemicals, plastics, and rubber products Nonmetallic mineral products Primary metals Fabricated metal products Transportation equipment Computer and electronic products Machinery, electrical equipment, and appliances Furniture and related products Miscellaneous manufacturing Utilities Construction Wholesale and retail trade, accommodation, and food services Wholesale trade Retail trade Accommodation and food services Transportation and warehousing Information services Finance and insurance Real estate and renting and leasing Other services Total Sales (billion $) 0.8 Share of total (%) 0.4 0.3 12.1 3.0 1.0 0.3 0.1 5.2 1.3 0.4 0.0 0.1 15.5 1.8 2.6 2.1 64.6 4.9 11.3 0.2 6.7 0.8 1.1 0.9 27.9 2.1 4.9 0.1 (a) (a) 0.4 62.9 29.7 32.6 0.6 4.4 3.1 17.9 1.3 3.3 231.5 0.2 27.1 12.8 14.1 0.3 1.9 1.3 7.7 0.6 1.4 100.0 (a) (b) (a) (a) (a) (a) (a) Note: Baseline data are from the GTAP-Foreign Direct Investment (FDI) model, pulled from the U.S. Bureau of Economic Analysis (BEA). a Data have been suppressed to avoid disclosure of the data of individual companies. For the purpose of constructing the baseline of the GTAPFDI model, data from a previous year, when available from the BEA, are used instead. b Less than $50 million. The investment provisions under USMCA represent commitments to maintaining current foreign equity requirements in the member countries. Furthermore, the investment provisions also include the scaleback of ISDS between the United States and Mexico, as well as the elimination of ISDS between Canada and Mexico, after a three-year phaseout period. To estimate the effects of commitments made under USMCA on investment as well as the effect of changes in ISDS provisions, this analysis ran one simulation using the GTAP-FDI model. In the simulation, Mexico, Canada, and the United States were host countries for FDI. The host country’s foreign affiliate sales to all the other 18 owner regions that were endogenous in the model were made exogenous, while the sectoral productivity parameters that were exogenous in the model were made endogenous. To quantify the commitments on investment, the host country’s foreign affiliate sales for all owner countries were shocked by the amounts given by the gravity-inspired econometric approach described in the previous section. At the same time, to quantify the effects of changes in ISDS, U.S. foreign affiliate 372 | Background The Medicare Advantage (MA) program allows Medicare beneficiaries (who are enrolled in both Part A and Part B) to receive benefits from private plans rather than from the traditional fee-for-service (FFS) program. In 2018, the MA program included about 3,100 plan options offered by 185 organizations, enrolled over 20 million beneficiaries (33 percent of all Medicare beneficiaries), and paid MA plans about $233 billion (not including Part D drug plan payments). The Commission supports including private plans in the Medicare program because they allow beneficiaries to choose between FFS Medicare and alternative delivery systems that private plans can provide. Plans often have flexibility in payment methods, including the ability to negotiate with individual providers, care-management techniques that fill potential gaps in care delivery (e.g., programs focused on preventing avoidable hospital readmissions), and robust information systems that can potentially provide timely feedback to providers. Plans also can reward beneficiaries for seeking care from more efficient providers and give beneficiaries more predictable cost sharing; one trade-off is that plans typically restrict the choice of providers. By contrast, traditional FFS Medicare has lower administrative costs and offers beneficiaries an unconstrained choice of health care providers, but it lacks incentives to coordinate care and is limited in its ability to modify care delivery. Because private plans and traditional FFS Medicare have structural aspects that appeal to different segments of the Medicare population, we favor providing a financially neutral choice between private MA plans and traditional FFS Medicare. Medicare’s payment systems, as well as monitoring and enforcement efforts, should not unduly favor one component of the program over the other. Efficient MA plans may be able to capitalize on their administrative flexibility to provide better value to beneficiaries who enroll in those plans. However, some of the extra benefits that MA plans provide their enrollees result from payments that would have been lower under FFS Medicare for similar beneficiaries, in some parts of the country. Thus, some of those benefits are financed by higher government spending and higher beneficiary Part B premiums (including the premiums for enrollees in traditional FFS Medicare) at a time when Medicare and its beneficiaries are under increasing financial stress. To encourage efficiency and innovation, MA plans need to face some degree of financial pressure and effective monitoring and regulation, like the Commission recommends for providers in the traditional FFS program. One method of achieving financial neutrality is to link private plans’ payments more closely to FFS Medicare costs within the same market. Alternatively, neutrality can be achieved by establishing a government contribution that is equally available for enrollment in either FFS Medicare or an MA plan. The Commission will continue to monitor plan payments and performance and begin to develop policies to further improve the efficiencies of MA. Each year, the Commission provides a status report on the MA program. To monitor program performance, we examine MA enrollment trends, plan availability for the coming year, and payments for MA plan enrollees relative to spending for FFS Medicare beneficiaries. We also provide updates on risk adjustment, risk coding practices, and current quality indicators in MA. Trends in enrollment, plan availability, and payments In contrast to traditional FFS Medicare, beneficiaries in MA enroll in private health plans. Medicare pays plans a fixed rate per enrollee rather than FFS Medicare’s fixed rate per service. Types of MA plans Our analysis of the MA program uses the most recent data available and reports results by plan type. The analysis does not cover non-MA private plan options that may be available to some beneficiaries, such as cost plans. The MA plan types are: • HMOs and local preferred provider organizations (PPOs)—These plans have provider networks and, if they choose, can use tools such as selective contracting and utilization management to coordinate and manage care and control service use. They can choose individual counties to serve and can vary their premiums and benefits across counties. These two plan types are classified as coordinated care plans (CCPs). • Regional PPOs—These plans are required to offer a uniform benefit package and premium across CMS- Report to the Congress: Medicare Payment Policy  |  March 2019 349 Chapter 11 Distribution List • Isuzu Motors America, LLC • Isuzu Technical Center of America, Inc. • Jaguar Land Rover North America, LLC • Karma Automotive LLC • Kia Motors America • Koenigsegg Automotive AB • Kraco Enterprises, LLC • Kumho Tire U.S.A., Inc. • Landi Renzo USA • Lionshead Specialty Tire & Wheel LLC • LiquidMetal Motorsports, Inc. • LiquidSpring LLC • Lotus Cars USA, Inc. • Mack Trucks • Maserati North America, Inc. • Maxion Wheels/Hayes Lemmerz • Mazda Motor Corp. • Mazda North American Operations • McLaren Automotive Incorporated • Mercedes-Benz USA, LLC • Michelin North America, Inc. • Midway Specialty Vehicles • Mitsubishi Motors North America, Inc. • Mobility Ventures LLC • Morgan 3 Wheeler Limited • Nissan North America, Inc. • Nissens North America, Inc. • Nitto Tire U.S.A. Inc. • Norgren Inc. • Oreion Motors LLC. • Pagani Automobili SpA • Pirelli Tire LLC • Polaris Industries, Inc. • Porsche Cars North America, Inc. • Prime-Time Specialty Vehicles • PT Multistrada Arah Sarana, Tbk • Robert Bosch LLC • Rolls-Royce Motor Cars, Ltd. 11-26 Appendix J: Modeling Investment sales to Mexico were shocked by the amount taken from Egger and Merlo (2007) for all the sectors except the five exempted sectors (oil and natural gas, power generation, telecommunications, transportation services, and infrastructure). 891 U.S. investors in these five sectors that are “a party to a covered government contract” would continue to receive protection under ISDS, similar to the level of protection that they receive under NAFTA. Meanwhile, Canadian foreign affiliate sales to Mexico for all sectors were also shocked by the amount taken from Egger and Merlo (2007). 892 With a decline of U.S. foreign affiliate sales in Mexico as a result of the changes in ISDS provisions, overall output in different sectors in Mexico would also decline, leading to a decrease in overall productivity in Mexico. The GTAPFDI model then calculated the productivity change and the change in capital expenditure in each sector in each host country. Finally, the estimated productivity gains and change in capital expenditure for the three member countries were incorporated into the main economy-wide simulation. Egger and Merlo, “The Impact of Bilateral Investment,” 2007. As is indicated in chapter 8, Egger and Merlo “the Impact of Bilateral Investment,” 2007, found that the ratification of bilateral investment treaties (BITs) is correlated with a 4.8 percent increase in outward FDI stock. Meanwhile, Oldenski, “What Do the Data Say?” 2015, argues that since investor-state dispute settlement (ISDS) is a key part of BITs which makes these treaties enforceable, ISDS is also likely to promote foreign direct investment (FDI), particularly to developing countries. Therefore, to account for the change in ISDS provisions under the USMCA, the FDI model shocks a reduction of U.S. foreign affiliate sales to Mexico in all sectors except the aforementioned five sectors by 4.8 percent, combined with a reduction of Canadian foreign affiliate sales to Mexico in all sectors by 4.8 percent. One caveat here is that BITs include other enforcing mechanisms such as state-to-state dispute settlement (SSDS); moreover, transforming the 4.8 percent change in outward FDI stock into a 4.8 percent change in foreign affiliate sales assumes a full expansion of the production function. Therefore, the results from the FDI model should be interpreted as an upper band estimate. 891 892 United States International Trade Commission | 373 ...
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