Trade with Canada and Mexico is a significant driver of U.S. economic growth, and with a two-decade record to examine, it’s plain to see that the North American Free Trade Agreement (NAFTA) has generated substantial new opportunities for U.S. workers, farmers, consumers, and businesses.
More than 125,000 small and medium-size businesses export to our two North American neighbors, and they are our largest export markets by far. Most important, trade with Canada and Mexico supports 14 million American jobs.
The business community welcomes the opportunity to update the agreement, and as NAFTA negotiations are underway, the U.S. Chamber understands that now is the time to modernize NAFTA.
American jobs supported by trade with Canada and Mexico
increase in agricultural exports since NAFTA enactment
small-and medium-size businesses sell goods and services to Canada and Mexico
cumulative trade surplus in manufactured goods with Canada and Mexico, 2008-2014
NAFTA Works for US
Myths and Facts about NAFTA
NAFTA sent U.S. factory jobs abroad with a “giant sucking sound.”
It never happened.
U.S. manufacturers added more than 800,000 jobs in the four years after NAFTA entered into force, according to the Bureau of Labor Statistics. This boom in factory jobs came after a period before NAFTA entered into force (1980–1993) when the United States lost nearly 2 million manufacturing jobs. Canada and Mexico are the top two destinations for U.S. manufactured goods exports, which all told support more than half of America’s 12.3 million factory jobs.
NAFTA added to the U.S. trade deficit.
With regard to Canada and Mexico, the United States ran a cumulative trade surplus in manufactured goods of more than $79 billion over the past seven years (2008-2014).
For services, the U.S. surplus was $41.8 billion in 2014 alone. The fact that substantial U.S. petroleum imports from Canada and Mexico contribute to the overall U.S. trade deficit stems from geology—not NAFTA.
NAFTA has contributed to unemployment.
The U.S. unemployment rate was markedly lower in the years immediately after NAFTA came into force (it averaged 5.1% in 1994–2007) than in the period immediately before (it averaged 7.1% in 1982–1993).
Trade with Canada and Mexico supports nearly 14 million U.S. jobs, and nearly 5 million of these jobs are supported by the increase in trade generated by NAFTA, according to a comprehensive economic study commissioned by the U.S. Chamber.
Trade rumors always swirl in late July. This year, the usual Major League Baseball scuttlebutt is mixed with rumors about a surge of momentum toward a new North American Free Trade Agreement (NAFTA).
Some of these reports will be borne out, but others are indeed just rumors. Let’s take some of the chief rumors head on:
“A breakthrough is imminent”
World leaders gathered last week in Davos, Switzerland, for the annual World Economic Forum, where evidence of the realities and opportunities of our global economy were on full display. President Trump attended the forum and heard from many leaders eager to do business with America.
In soccer, an “own goal” occurs when a player causes the ball to go into his or her own team’s goal, resulting in a goal being scored for the other team.
This can happen in trade, too. One example from the North American Free Trade Agreement (NAFTA) negotiations has left some U.S. business leaders shaking their heads in disbelief.