NCPA - National Center for Policy Analysis

NAFTA's Nifty, Studies Show

January 4, 2000

It's been nearly six years since the North American Free Trade Agreement took effect -- and the results, contrary to its opponents' dire warnings, have been astoundingly good for the U.S. economy.

Since 1993, U.S. exports to Canada increased by more than 50 percent and those to Mexico nearly doubled. The Office of U.S. Trade Representative says trade with Mexico supports some 2.3 million U.S. jobs.

The surge in exports has benefited nearly every state. Recently, the Mackinac Center, based in Michigan, took a look at what NAFTA has done for that state's economy.

  • Although its exports to Mexico had dropped 25 percent in the four years prior to NAFTA, Michigan-made goods exported to Mexico surged 148 percent under NAFTA.
  • The Commerce Department says 83.3 percent of Michigan's industries have seen their sales to Canada rise since NAFTA took effect.
  • And 67 percent of Michigan industries saw exports to Mexico climb.
  • The state's unemployment rate has dropped from 8.2 percent the year before the treaty took effect to less than 4 percent this year.

Although Rep. David E. Bonior (D-Mich.) warned that "Michigan's auto industry will eventually vanish" under NAFTA, it has actually added more than 100,000 jobs under the treaty.

Source: Paul Kengor, Michael LaFaive and Grady Summers, "Trade Liberalization: The North American Free Trade Agreement's Economic Impact on Michigan," December 20, 1999, Mackinac Center for Public Policy, 140 West Main Street, P.O. Box 568, Midland, Mich. 48640, (517) 631-0900; Macroscope, "NAFTA's Boom," Investor's Business Daily, January 3, 2000.


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