Heritage Foundation: Economic benefits of NAFTA
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Despite all the doom and gloom predicted by the North American Free Trade
Agreement's (NAFTA) detractors, trade protectionists cannot deny figures
showing its success. According to a report by John Sweeney, a top trade
analyst for the Heritage Foundation, NAFTA has produced from 1993 to 1996:
- A trade increase of $127 billion between the U.S., Canada and Mexico -- a 43 percent gain in NAFTA's first three years.
- U.S. exports to Mexico hit a record $57 billion -- an increase of 37
percent.
- In the fourth quarter of 1996 alone, the Department of Commerce reports U.S. exports to Mexico increased at an annual rate of $64 billion.
- U.S. market share in Mexico increased from 69 percent to 76 percent
of total Mexican imports.
The predicted "giant sucking sound" of jobs crossing the borders
has not been heard either, Sweeney notes. Over the same 1993 to 1996 time
period:
- During NAFTA's first three years, 39 of the 50 states increased their
exports to Mexico; moreover, 44 states reported a growth in exports to
Mexico during 1996
- At the same time, the U.S. economy has produced an additional 12 million
net jobs and unemployment has dipped from 7.5 percent to just 4.9 percent.
- Manufacturing, the sector predicted to be most adversely affected by
NAFTA, has posted a net gain of 1.4 million new jobs.
- Figures from the U.S. Trade Representative's office shows U.S. exports
to Mexico supports some 2.3 million jobs in America.
In addition, NAFTA's recorded gains to date are only the beginning, according
to a dynamic economic model by the U.S. Federal Reserve Bank of Chicago.
The model shows by year 2004, NAFTA's tariff-flattening plans will produce
a 20 percent increase in trade between the U.S., Canada and Mexico -- twice
as large as was predicted.
Source: Donald Lambro, "NAFTA Success Saga Beyond Expectations,"
Washington Times, June 2, 1997.
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