A big part of public policy debates involves countering misleading claims. In this regular feature, I highlight important facts about the key issues being debated around Washington, D.C.
Claim: The North American Free Trade Agreement (NAFTA) has been a “disaster” for the United States.
What you need to know: The Trans-Pacific Partnership (TPP) has reignited the debate over the benefits of trade. Critics of TPP falsely claim that NAFTA threw Americans out of work.
This premise is wrong. Data show that NAFTA has, in fact, spurred job creation. Since 1994, trade with Canada and Mexico has risen nearly fourfold to $1.3 trillion in 2014, and the two countries buy one-third of all U.S. merchandise exports. Trade with Mexico and Canada supports 14 million jobs. Five million of these came from increases in trade because of NAFTA.
Jacqueline Varas of the American Action Forum notes how U.S. exports to Mexico have increased under NAFTA [see the chart below]:
Apart from recessions, the value of U.S. exports to Mexico has steadily increased since 1994. Even more telling is the rise of U.S. exports to Mexico as a percentage of total U.S. exports. Before NAFTA went into effect, only about 9 percent of U.S. exports went to Mexico. That figure has risen to almost 15 percent showing that concerns over NAFTA’s disproportionate benefits to Mexico, and consequent damage to the U.S., may be misguided.