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." This is not
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
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)." Moreover:
- America's NAFTA partners were Missouri's
top export markets in 1998, with exports of $1.6 billion to Canada
and $1.2 billion to Mexico, according to the Commerce Department.
They were also the top two export markets for Georgia, Indiana,
Michigan, North Carolina, and Pennsylvania in 1998.
- "Sales of U.S. corn to Canada increased
more than 127 percent in volume between 1990 and 2000 and increased
nearly eighteenfold to Mexico during 1993 to 2000," according to
the U.S. Department of Agriculture, which adds that "NAFTA partners
purchase 27 percent of U.S. agricultural exports."
- U.S. exports to Mexico of motor vehicles
in 1998 were 14 times greater than in 1993, rising to $2.4 billion.
Exports of parts were 30 percent greater, reaching $9.5 billion.
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. 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. Moreover:
- After a five-year analysis of NAFTA, the
Department of Commerce concluded:
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.
- Bureau of labor Statistics data confirm
that "Total employment in the U.S. motor vehicle industry has grown
five times faster following NAFTA that in the years prior to the
- U.S. unemployment has declined
significantly since NAFTA was signed. For example, U.S.
unemployment in 1992 stood at 7.5 percent; today, it is 4.5
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." 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." NAFTA's side
agreements have focused attention on significant environmental
- Since NAFTA was implemented, Mexico has
taken the initiative to pass environmental laws similar to those of
the United States and
- The North American Agreement on
Environmental Cooperation (NAAEC), NAFTA's supplemental agreement
on the environment, promotes development through mutually
supportive environmental and economic policies. It also created the
Commission for Environmental Cooperation (CEC) to protect,
conserve, and improve the environment.
- The NAFTA agreements also created the
Border Environment Cooperation Commission (BECC) and the North
American Development Bank (NADB). The BECC assists border
communities in addressing environmental concerns and certifies
environmental projects. The NADB uses private and public funding to
finance BECC projects.
- According to the U.S. Department of
Commerce, since the NADB's establishment in 1995, it "has approved
a total of $105 million in loans, guarantees, [and] grants to help
finance 14 environmental projects benefiting over four million
residents on both sides of the [U.S.-Mexico] border."
- As a result of one BECC-NADB project in
the Lower Valley of El Paso, Texas, 2,600 households will be
connected to a wastewater treatment system this year, according to
the Office of the U.S. Trade Representative.
- Thanks to another wastewater treatment
project in Mexico, 93 percent of the residents in the city of
Ciudad Juarez will have sewage services. Without NAFTA, this
probably would not have occurred.
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." 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
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." 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