Published
August 16, 2017
[This is part of an ongoing series entitled “Modernizing NAFTA,” which examines the importance of modernizing the North American Free Trade Agreement (NAFTA) and it's critical impact on jobs, economic prosperity, and trade. Stay tuned as negociations unfold.]
Twenty-five years ago this week, negotiations for the North American Free Trade Agreement (NAFTA) were concluded. And today in Washington, officials will launch negotiations to modernize the agreement for a new era of North American commerce.
It is altogether fitting and proper that we should update the NAFTA: After all, the world has changed substantially in the past quarter century. Americans, Canadians, and Mexicans will all benefit if the pact can be modernized to take into account technological, economic, and other changes in the U.S., North American, and global economies.
As the leading voice of the U.S. business community, the U.S. Chamber of Commerce has been at the center of this year’s debate over the NAFTA for a simple reason: Some 14 million U.S. jobs depend on trade with Canada and Mexico, and well over $1 trillion in trade crosses our borders annually. The livelihoods of many of our nation’s farmers, ranchers, manufacturers, service providers, and small businesses are directly or indirectly tied to the agreement.
So the Chamber has fought hard to ensure that negotiators recognize those benefits and focus on adding to them by preserving market access and rules that work well. U.S. Trade Representative Robert Lighthizer has adopted just such a stance, insisting that he and his colleagues will recall the Hippocratic Oath’s commitment to “first, do no harm.”
We’ve also pushed our leaders to follow the process set out in the 2015 Trade Promotion Authority law, which has the buy-in of Congress and the support of the business and agriculture communities. This process is working well, and congressional trade leaders are providing valuable, real-time input.
As House Ways and Means Committee Chairman Kevin Brady has said, it will be important to proceed,
in a manner that retains current benefits in a seamless way that does not disrupt the current agreement.
In its negotiating objectives released in July, the administration has signaled it will pursue strong, enforceable standards that will enable an improved NAFTA to serve as a model for future trade agreements.
For our part, the Chamber has recommended that negotiators focus on areas like digital commerce, intellectual property, agriculture, energy, customs, investment, procurement, rules of origin, state-owned enterprises, express delivery services, and regulatory and technical barriers to trade. We’ll dig into these issues in depth later in this blog series.
Today, though, is a day to consider the stakes — and to recall the powerful contribution the NAFTA is already making to the U.S. economy:
- Manufacturing:Canadians and Mexicans buy nearly half a trillion dollars’ worth of U.S. manufactured goods each year (or one-third of the total). Our two North American neighbors purchase more “made-in-the-USA” manufactured goods than the next ten largest export markets combined.
- Agriculture: U.S. agricultural exports to Canada and Mexico have quadrupled under the NAFTA — topping $38 billion last year — and are the top markets globally for a host of commodities grown all across the United States.
- Services: With new market access and clearer rules afforded by the NAFTA, U.S. services exports — in fields ranging from engineering and audiovisual services to finance and express delivery— bound for Canada and Mexico have tripled, rising from $27 billion in 1993 to $85 billion in 2016.
- Small Business: Canada and Mexico are the top two export destinations for U.S. small and medium-size enterprises, more than 125,000 of which sell their goods and services in one or both markets.
The Chamber was a strong voice for the American business community during the original NAFTA negotiations 25 years ago, and we welcome the opportunity to update the agreement. Our economy has changed in exciting ways over recent decades—partly because of the trade, growth, and cooperation the NAFTA has promoted. Now we have an opportunity to make the agreement even better and, in doing so, to launch a new age of economic growth and job creation.
About the authors
John G. Murphy
John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.
