Making the Case for Modernizing NAFTA

The United States, Canada and Mexico entered into the North American Free Trade Agreement (NAFTA) 25 years ago, creating the world’s largest free trade area by linking 487 million people and totaling $21.4 trillion in gross domestic product (GDP). Since NAFTA was enacted, North American trade has increased significantly – from roughly $290 billion in 1993 to $1.1 trillion in 2016. All of this new trade has led to lower prices for American families, and new and better jobs for American workers – reasons why free markets make life better here at home. 

It’s also why Senate Finance Committee Chairman Orrin Hatch (R-Utah) is a staunch advocate for opening more markets to American products and services around the globe. As the administration works to modernize this decades-old trade deal, Chairman Hatch has emphasized that an updated NAFTA should help Americans sell more products and services in Canada and Mexico and establish strong intellectual property rules to benefit America’s innovators, artists and creators.

^{1.                 “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,” p. 8.}

^{2.                 “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,” p. 8.}

^{3.                 “Most estimates conclude that the deal had a modest but positive impact on U.S. GDP of less than 0.5 percent, or a total addition of up to $80 billion dollars to the U.S. economy upon full implementation, or several billion dollars of added growth per year.”}

^{4.                 “Since the treaty was signed…Canada, the United States’ fifth-largest source of foreign capital, has invested over $200 billion in the United States.”}

^{5.                 “Mexico has increased investment in its northern neighbor in sectors as diverse as cement, bakery, dairy and retail.”}

^{6.                 “Canada and Mexico are the two largest markets in the world for U.S. exports, purchasing more than one-third of U.S. merchandise exports ($553 billion in 2014 or 34% of total goods exports),” p. 4.}

^{7.                 “For American farmers and ranchers, NAFTA has been a bonanza. U.S. agricultural exports to Canada and Mexico topped $41 billion in 2014, a 350% increase from just $9 billion in 1993,” p. 8.}

^{8.                 “With new market access and clearer rules afforded by NAFTA, U.S. services exports to Canada and Mexico have tripled, rising from $27 billion in 1993 to $92 billion in 2014,” p. 1.}