NAFTA Under Assault: Reassessing Its Impact
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Chamber President and CEO Tom Donohue is at the Milken Institute Global Conference today where he will be participating in a panel entitled "NAFTA Under Assault: Reassessing Its Impact". Here are his opening remarks:
Let me start with a basic point - If NAFTA didn’t already exist, we’d have to invent it. Why? Because the benefits are so important, and so obvious. It just makes good sense; economically, politically, and culturally.
Think about what a success it’s been for all three countries. Trade has tripled among us and will surpass a trillion dollars this year. For the United States, it has allowed us to triple our exports to Canada and Mexico. All three North American economies have grown by 50% or more since its implementation, and the agreement helped play a key role in that. In short, NAFTA is an integral part of the North American landscape. It works.
Despite this tremendous record of success, some of our presidential candidates speak openly of renegotiating NAFTA - a spectacularly dumb idea!
Why open that can of worms? The United States isn’t the only country that would want to change things. In fact, it could end up costing us a lot of money. We ought to keep our mouths shut and get on with enjoying its benefits. It would also violate the principles we’ve signed on to with two of our closest allies and neighbors.
NAFTA critics have it all wrong. They say it’s destroyed a million American jobs. But since NAFTA came into force, the U.S. economy has generated more than 32 million new jobs. Of course NAFTA didn’t create all of them, but it did help create some of them, including many high-wage, high-skill jobs. While trade has helped the vast majority of workers in all three countries, some people have lost their jobs because of trade. And we need to make certain those workers get the training and support they need to get back on their feet quickly.
Critics say the agreement has hurt U.S. manufacturers. In reality, our manufacturers have set new records for output, revenues, profits, and return on investment. They say NAFTA has lowered U.S. wages. The reality is, total compensation for workers grew half again as fast as in the decade before NAFTA. We need more free trade agreements, not fewer, and we don’t need to mess with the ones that are really working.
But, we won’t get more FTAs until we win the public debate on trade. This is a challenging political environment for trade—not just in the United States, but around the world. The leaders of our three countries delivered a strong message at the North American Leader’s Summit in New Orleans last week—trade is good for our workers, our businesses, and our economies. The Chamber attended because we are leaders in the North American Competitiveness Council. Tom d’Aquino is one of our great partners in this effort.
The Chamber hosted a reception for President Bush on the eve of the meeting. He is a powerful advocate for free and fair trade. While our current leaders might be behind this cause, we need to convince our citizens. That’s why the Chamber is stepping up its TradeRoots initiative, the only sustained, national trade education program in the country. And, we need to work harder to deliver the benefits of trade to more of our citizens.
One way to do that is to ensure that North American trade is conducted as efficiently and fairly as possible. We need to facilitate border crossings, harmonize or regulations, and work toward an affordable, clean supply of energy. We import more oil from Canada and Mexico than any other countries in the world. If this doesn’t illustrate our interdependence here in North America, I don’t know what does.
But products aren’t the only things that must have the ability to move easily across borders—workers must be able to so as well … safely, legally, and securely. And frankly, that won’t happen until America fixes its broken immigration system. Look at what’s happening in farming—we’re moving a large part of our farming apparatus to Mexico because of bad immigration policies. We can’t get the workers we need, and other’s have. America has not acquitted itself well on immigration. We shouldn’t be very proud of ourselves. We need to do better, and soon.
The bottom line is this: our government leaders and our citizens must not forget this fundamental reality—we live in a highly competitive worldwide economy. The people of Canada, Mexico, and the United States face a choice. We can either ignore the escalating global competition and risk falling behind, or we can take steps to ensure that we have the tools we need to compete and win. Free and fair trade is one of our most essential tools, and it’s worth fighting for.
The only reason ever to reopen NAFTA is to expand it and strengthen it.