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Supporters of NAFTA estimate that some 14 million jobs rely on trade with Canada and Mexico combined, and the nearly 200,000 export-related jobs created annually by NAFTA pay an average salary of 15% to 20% more than the jobs that were lost, according to a PIIE study. Most studies conclude that NAFTA has had only a modest positive impact on U.S. And while the costs of NAFTA are highly concentrated in specific industries like auto manufacturing - where job losses may be significant for specific firms - the benefits of the trade pact (such as lower prices for imported electronics or clothing) are distributed widely across the U.S., as they are in the case of any trade pact worldwide. For the United States, with its population of 320 million at the time of that study, the pure economic payoff was thus only $400 per person, while per capita GDP was close to $50,000. For example, according to a 2014 report by the Peterson Institute for International Economics (PIIE), the United States has been $127 billion richer each year thanks to “extra” trade growth fostered by NAFTA. Moreover, NAFTA has been the fundamental anchor for reforms that make Mexico a more modern economy and open society.”įor all that, most studies conclude that NAFTA has had only a modest positive impact on U.S. As for Mexico’s interest in this bilateral relationship, it can be summarized in two facts: about 80% of Mexico’s exports go to the U.S., while 50% of the accumulated foreign direct investment received between 20 comes from the U.S. By promoting the tight integration of North American industrial supply chains, “NAFTA is creating partners and not competitors among its member countries. Gutierrez adds that there are lesser-known benefits of NAFTA. (The NADB acts as a binational catalyst in helping communities along the U.S.-Mexico border develop affordable, long-term infrastructure.) these days than do all of the so-called BRIC nations combined – Brazil, Russia, India and China. Thus, he explains, Mexico imports more from the U.S. Geronimo Gutierrez, managing director of the North American Development Bank (NADB), notes that trade between the United States and Mexico reached over $500 billion in 2015, a five-fold increase since 1992, when NAFTA negotiations concluded. is actually “Made in USA” content, as are 40 cents out of every dollar for goods imported into the U.S. According to the Wilson Center, twenty-five cents out of every dollar of goods that are imported from Canada to the U.S. NAFTA has also facilitated a multi-layered integration of the U.S., Mexican and Canadian supply chains. trade with Mexico, a flow that has been greatly facilitated by NAFTA, which has helped eliminate costly tariff and non-tariff barriers. foreign direct investment (FDI) in Mexico rose from $15 billion to more than $107.8 billion in 2014. Cross-border investment has also surged during those years, as the stock of U.S. On the positive side, overall trade between the three NAFTA partners - the U.S., Canada and Mexico - has increased sharply over the pact’s history, from roughly $290 billion in 1993 to more than $1.1 trillion in 2016. That impact, they say, is not always easy to disentangle from other economic, social and political factors that have influenced U.S. The environmental and labor side agreements negotiated by our administration will make this agreement a force for social progress as well as economic growth.” Twenty-three years later, scholars and policy makers often disagree about the impact that NAFTA has had on economic growth and job generation in the U.S.
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When President Bill Clinton signed the North American Trade Agreement (NAFTA) in December 1993, he predicted that “NAFTA will tear down trade barriers between our three nations, create the world’s largest trade zone, and create 200,000 jobs in by 1995 alone.