NAFTA More Successful Than Hoped

Posted September 3, 2003 at 8:58am

The North American Free Trade Agreement has been one of the greatest commercial successes in American history. NAFTA’s success has been of such a grand scope and wide reach that its merits are now taken for granted.

The combined 406 million citizens of Mexico, the United States and Canada now enjoy the benefits of the largest and most prosperous free trade area in the world ($11 trillion combined annual gross domestic product).

Because of NAFTA, we import less expensive products and export our own high-quality goods and services into the Mexican and Canadian markets without the hidden taxes and costs most nations impose on trading partners.

All told, more than $1.6 billion in trilateral trade pass through the continent every day, at a savings to an American family of four of between $1,300 and $2,000 per year. NAFTA, then, has spurred economic growth through importation and exportation, saved American consumers money by reducing or eliminating hidden taxes on foreign trade, and created high-paying jobs for almost 3 million American families.

Since the creation of NAFTA in 1994, trade among the three nations has more than doubled, from $297 billion in 1993 to $614 billion last year. That $317 billion increase in trade resulted in almost 3 million new American jobs. And these jobs earn 15 percent more than the average national wage.

Most of these jobs were created by small businesses, the greatest beneficiaries of the advantages of free trade in general and NAFTA in particular. American entrepreneurs led the way toward new economic heights when their small and flexible businesses, through new and innovative businesses and partnerships, fueled a massive economic expansion and created jobs and opportunities at home and around the world.

In short, it has been a success beyond the hopes of its proponents in the early 1990s. But it has done so much more than help American families find jobs and pay less for goods and bolster the profits of our businesses.

It has helped stabilize the regional economy and remove unnecessary barriers between the United States and our neighbors to the south and north, creating a vast model of friction-free commerce for the rest of the world.

Through the execution of NAFTA, we’ve had real-world experience in free trade with free nations so that we can develop similar treaties with nations in other regions. We have learned the importance of certain provisions, such as those designed to protect the environment, raise labor standards and safeguard intellectual property rights.

Through free-trade agreements, the United States can leverage its economic power for other uses. We can use free trade to export not only American goods and services, but American values as well. Greater interaction between American businesses and their counterparts around the world serve as advertisements for our way of life. Our commitments to human rights, individual liberties and environmental protection are foreign to many nations around the world, and through the engagement of free trade we can share our ideals along with our commerce.

And more than anything else, NAFTA has shown the American people — after a harsh but healthy debate — that free trade is in our interests.

It is in our economic interest, as the data above shows. But it is also in our strategic interests.

The ties that bind international commerce, the friendships that form among businessmen and companies, make friends of their nations.

The economic downturn we’re finally pulling ourselves out of was felt in Canada and Mexico as much as it was here. When the American economy suffers, so do those of our trading partners. But the constant flow of goods and services across our borders helped keep the downturn from becoming the kind of devastating recessions we’ve struggled through in the past.

Mexican and Canadian companies need our consumers as much as we need to compete in their markets. Working Americans can compete with any labor pool in the world, but without free trade, they’d never get the chance. Thanks to the unfettered access to markets in Canada and Mexico guaranteed by NAFTA, industries that were once bottled up in the American market have branched out to new horizons beyond our borders.

Finally, the closer nations become economically, the closer they become strategically. Our relationships with Canada and Mexico — brought closer by NAFTA — have helped strengthen the relationships we need to fight terror from coming across our borders. Canada and Mexico aren’t just our friends and partners; they’re our allies, too.

And that’s the fundamental point of free trade. It brings nations together so we can bolster economic growth around the globe. It creates jobs — good jobs, high-paying and stable jobs — in every economic sector. Free trade elevates the standards of living for wealthy nations, like the United States, and poorer nations of the developing world.

Through American leadership, we can build on the successes of NAFTA to develop a Free Trade Area of the Americas. Entering into free-trade agreements is what democracies do. There have been disputes and disagreements along the way, and there will be more in the future, but NAFTA has put into place a process by which those disputes can be dealt with through peaceful and frank negotiations.

The relationships we have with Mexico and Canada, thanks in part to NAFTA, we should have with every democracy on earth.

With Trade Promotion Authority, the United States now has another tool to break down trade barriers, open markets to American competition and generate growth and opportunities everywhere: a rising global tide that will lift all boats.

Rep. Tom DeLay (R-Texas) is the House Majority Leader.