How Allies Of Trade Came to NAFTA’s Defense | U.S. Chamber of Commerce
May 09, 2017 - 11:00am

How Allies Of Trade Came to NAFTA’s Defense


Senior Vice President for International Policy

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U.S. President Donald Trump with Justin Trudeau, Canada's prime minister. Photographer: Andrew Harrer/Bloomberg

Dozens of press accounts offered details about the events now referred to in the trade community as “NAFTA Wednesday” (April 26, 2017). As the Washington Post reported, President Trump was set to announce, “on the 100th day of his presidency, that he was withdrawing from the North American Free Trade Agreement … ‘I was all set to terminate.’

Members of Congress and the business and agriculture communities urged him not to do so, and they pressed the White House not to proceed. The Post continues:

As news of the president’s plan reached Ottawa and Mexico City in the middle of the week and rattled the markets and Congress, Commerce Secretary Wilbur Ross, Agriculture Secretary Sonny Perdue and others huddled in meetings with Trump, urging him not to sign a document triggering a U.S. withdrawal from NAFTA.

Perdue even brought along a prop to the Oval Office: A map of the United States that illustrated the areas that would be hardest hit, particularly from agriculture and manufacturing losses, and highlighting that many of those states and counties were “Trump country” communities that had voted for the president in November.

After careful deliberation, Trump decided against terminating NAFTA. However, it was useful for the administration to hear from members of Congress and representatives of the U.S. business and agriculture communities about the benefits they currently derive from trade with Canada and Mexico — thanks to a substantial degree to NAFTA.

From farm and ranch organizations to corporate CEOs to the halls of Congress, many spoke out about the potential cost of interrupting the $3.5 billion in trade that crosses North America’s borders every day.

As U.S. Chamber President Tom Donohue recently told a business audience in Mexico City, the jobs of 14 million Americans depend on trade with Mexico and Canada. NAFTA is “crucial to our manufacturing and services sectors, to U.S. farms, and to 125,000 American small and medium-size businesses” that export to Canada and Mexico, he added.

Others spoke out as well. American Automotive Policy Council President Matt Blunt issued a statement: “The integrated North American market is important to our global competitiveness. A withdrawal from NAFTA would severely undermine U.S. competitiveness and our ability to export product from the United States and we are very hopeful that the administration will improve and modernize the agreement in ways that builds on North America’s success as a manufacturing powerhouse and helps us stay competitive globally.

Other manufacturing sectors share this view. “NAFTA has been a success for the North American steel industry,” Tom Gibson, president of the American Iron and Steel Institute, told reporters shortly after last November’s election. “It’s strengthened North American manufacturing supply chains, especially with key customer groups like the automotive industry.

Perhaps no sector felt threatened by the possibility of withdrawing from NAFTA as intensely as U.S. agriculture. In a statement issued that day, U.S. Wheat Associates (USW) and the National Association of Wheat Growers (NAWG) declared: “Mexico is our largest U.S. wheat buyer, importing more than 10 percent of all U.S. wheat exports this year. NAFTA truly opened the door to the strong and growing market opportunity in Mexico. Closing that door would be a terrible blow to the U.S. wheat industry and its Mexican customers.

The head of the nation’s largest agricultural organization, American Farm Bureau Federation President Zippy Duvall, also issued a statement: “NAFTA has been overwhelmingly beneficial for farmers, ranchers and associated businesses all across the United States, Canada and Mexico for decades,” he said. “Walking away from those gains would have been a severe blow to the agricultural sector and we appreciate the path that will allow for reform and enhancement, rather than abandonment of past achievements.

Other broad business groups concurred. “Withdrawing from NAFTA would have disastrous consequences for U.S. businesses and workers, benefiting our competitors in Europe and Asia, including China,” Joshua Bolten, President and CEO of the Business Roundtable, told the Wall Street Journal.

Key congressional leaders spoke out as well. Senator John Cornyn of Texas, the second ranking Republican in the Senate and the GOP Whip, said: “It goes without saying that free trade has been a cornerstone of the economy in Texas, adding billions to our economy annually and bolstering our relationship with our partner to the south. In other words, free trade agreements, particularly NAFTA, the North American Free Trade Agreement, are critically important to many of my state’s leading industries, such as agriculture and energy.

After months of intense consultation with Chamber members, I have been impressed to learn just how broad support for NAFTA is among American companies of every size, sector, and region. In fact, we’ve learned a great deal about how different sectors are benefitting from the agreement in ways that we didn’t even know about.

The U.S. business and agriculture communities have come together to speak out in support of NAFTA and moves to modernize it — carefully, prudently, and holding fast to its many elements that are working well.

Donohue gets the last word:

Business understands that each of our countries brings a lot to the table, and that both sides will be enriched if we work together in partnership. And we know that if we seize opportunities in trade, energy, and other priorities, we can sharpen our competitive edge in a global economy—and we can be a powerful and positive influence in the world.

About the Author

About the Author

Senior Vice President for International Policy

Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy.