Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners

Thursday, May 13, 2010 - 8:00pm

May 14, 2010

To show the benefits of America's trade agreements for U.S. workers, the U.S. Chamber commissioned a study entitled Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners. It found nearly 18 million U.S. jobs depend on trade with America's free trade agreement (FTA) partners — 5.4 million of which were created by the increase in trade unleashed by the agreements.

"I defy anyone to name another budget-neutral government initiative that has generated anything like this number of jobs," said Donohue, who unveiled the study in a May 14 speech to the National Press Club.

The study examined U.S. FTAs in effect in 2008 with a total of 14 countries. It excluded three other countries where FTAs have only recently been implemented. The study employs a widely used general equilibrium economic model which is also used by the U.S. International Trade Commission, the WTO, and the World Bank.

The study's principal findings follow:

  • Total trade with the 14 FTA partners boosted U.S. GDP by $1.0 trillion. Total U.S. exports of goods and services to the world were $462.7 billion higher than they otherwise would have been because we trade with these countries. Further, trade with the FTA partners supported 17.7 million U.S. jobs across the range of U.S. industries.
  • The FTAs themselves generated $304.5 billion in U.S. output in 2008, or 2.1 percent of U.S. GDP. They expanded total U.S. exports of goods and services to the world by $462.7 billion. They also supported 5.4 million U.S. jobs.
  • Because Canada and Mexico are very large trading partners of the United States, it is no surprise that most of the gains from the FTAs result from the North American Free Trade Agreement (NAFTA). Its effects are also greater because it has been in force longer than many of the other FTAs. NAFTA trade represents 92 percent of the net employment gains associated with the 14 FTAs in 2008; 92 percent of the output gain, and 80 percent of the total U.S. goods and services export increases.
  • U.S. merchandise exports to our FTA partners grew nearly three times as rapidly as did our exports to the rest of the world from 1998 to 2008.