USTR - NAFTA at 10: Myth - NAFTA Was a Failure for the United States
Office of the United States Trade Representative

 

NAFTA at 10: Myth - NAFTA Was a Failure for the United States
11/01/2003

· NAFTA has been a huge success for the U.S. and its NAFTA partners. It has helped Americans work smarter, earn more and increase purchasing power. It has contributed to more trade, higher productivity, better jobs, and higher wages.

· In ten years of NAFTA, total trade among the three countries has more than doubled, from $306 billion to $621 billion in 2003. That’s $1.7 billion in trade every day.

· U.S. exports to Canada and Mexico grew from $142 billion to $263 billion in NAFTA’s first ten years. And Mexican exports to the U.S. grew 242 percent, improving lives and reducing poverty in Mexico.

· Some claimed NAFTA would contribute to U.S. industrial decline and a “giant sucking sound.” But after NAFTA was passed in 1993:

o U.S. manufacturing output soared in the 1990s, up 44% in real terms.

o U.S. employment grew over 20 million between 1993 and 2000.

o U.S. manufacturing wages increased dramatically, with real hourly compensation up by 14.4% in the 10 years since NAFTA, more than double the 6.5% increase in the 10 years preceding NAFTA.

o Income gains and tax cuts from NAFTA were worth up to $930 each year for the average U.S. household of four.

· More recent problems for manufacturers and their employees came long after NAFTA. These problems are due to a recent recession from which the U.S. is now recovering strongly. Much is blamed on imports, but in fact 80% of the increase in the U.S. manufactures trade deficit in the last three years is attributable to reduced exports and weak demand overseas, not increased imports.

· Some blame NAFTA for recent economic problems. But in fact, during the recent U.S. economic downturn, U.S. imports from Mexico were up less than 2 percent (last three years). By contrast, the U.S. economy added more than 20 million jobs during a time when imports from Mexico were booming in 1993-2000 (up 241 percent).

· Clearly U.S. employment trends reflect the health of the U.S. economy far more than the negotiation of trade agreements like NAFTA.

 
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