The North American Free Trade Agreement (NAFTA), which the United States implemented with Canada and Mexico in 1994, has benefited Americans substantially, according to U.S. government data. It has increased exports, expanded U.S. agriculture, improved environmental standards at home and abroad, and given Americans higher-paying jobs. Yet critics of free Trade continue to assert the opposite: that NAFTA has resulted in fewer U.S. exports, cost American jobs, and jeopardized the environment. The data clearly refute these claims.
Myth: NAFTA has
diminished U.S. exports
Critics often claim that America has gained little from NAFTA. For example, theUnited Auto Workers has stated that "NAFTA has been a disaster."1 This is not true.
exports to America's NAFTA partners have vastly outpaced U.S.
exports to the rest of the world
As U.S. Trade Representative Robert Zoellick points out, "U.S. exports to our NAFTA partners increased 104 percent between 1993 and 2000; U.S. Trade with the rest of the world grew only half as fast."2
According to the U.S. Department of Commerce, "During 1993-1998, U.S. goods and services exports to the world rose by approximately 45 percent (goods exports increased by nearly 47 percent). During the same period, exports of goods and services supported an additional 1.6 million jobs (to a total of 11.6 million in 1998)."3 Moreover:
Myth: NAFTA has
cost American jobs
Representative David Bonior (D-MI) is among critics of NAFTA who claim that "hundreds of thousands of good paying jobs have been lost" because of the agreement.7 This is false.
has led to more higher-paying jobs for Americans
The Bureau of labor Statistics has reported that more people lose their jobs each year from labor strikes than from import competition.8 Moreover:
We estimate U.S. exports to Canada and Mexico support over 600,000 more jobs now than in 1993. U.S. exports to Canada support an estimated 1.7 million jobs, over 300,000 more jobs than in 1993. Exports to Mexico in 1998 supported almost a million jobs, up over 350,000 jobs from 1993. jobs supported by exports pay 13 to 16 percent more than other U.S. jobs.9
Myth: NAFTA is
not environmentally friendly
Representative Bonior also claims that "Since NAFTA, factories have moved to Mexico to take advantage of cheap labor and lax environmental standards."12 This claim also is not borne out by the facts.
side agreements on the environment have focused public attention on
environmental problems and have helped to finance solutions
According to Tiahoga Ruge of the North American Centre for Environmental Information and Communication, "NAFTA has brought the environment into the mainstream in Mexico, as something to be taken seriously."13 NAFTA's side agreements have focused attention on significant environmental concerns:
According to the Office of the U.S. Trade Representative, "we Trade $1.8 billion a day with our NAFTA partners--that's $1.2 million a minute."16 As U.S. government data indicate, without NAFTA, the United States would have lower-paying jobs and would export less, and Mexico and the United States would have lower environmental standards.
Congress has the opportunity to expand the benefits of Trade agreements like NAFTA--which was passed with bipartisan support--to other countries by granting the President Trade promotion authority (TPA) this session. Such Trade agreements stimulate innovation and opportunity, both of which will bring the citizens of the United States and its trading partners many benefits.
U.S. Trade Representative Robert Zoellick points out that "NAFTA and the Uruguay Round [of the General Agreement on Tariffs and Trade] have boosted the annual income and lowered the cost of purchases for an average family of four by $1,300 to $2,000."17 New Trade agreements can only add to the income and savings of American families and encourage sound economic and environmental policies among its partners. Nothing less than prosperity is at stake.
Sara J. Fitzgerald is a Trade Policy Analyst in the Center for International Trade and Economics at The Heritage Foundation.
1. United Auto Workers, "Derail Fast Track," UAW Politics , July 18, 2001, at http://www.uaw.org/politics/dclink/01071801fasttrack.html.
6. U.S. Department of Commerce, Office of Automotive Affairs, International Trade Administration, Fifth Annual Report to Congress Regarding the Impact of the North American Free Trade Agreement Upon U.S. Automotive Trade With Mexico , at http://www.ustr.gov/html/autos99.htm (July 31, 2001).