The North American Free Trade Agreement (NAFTA) has been in effect since January 1, 1994, and it continues to be an interest to the US Congress, given the importance of Canada and Mexico as US trading partners, and also because of the implications NAFTA has for US trade policy.
NAFTA, upon its conception, wasn’t welcomed with 100% open arms. In fact, many economists thought it would contribute to the exact opposite of what the free trade agreement was proposing. According to a recent report from the Congressional Research Service “NAFTA at 20: Overview and Trade Effect”, opponents warned that the agreement would create huge job losses in the US as companies moved production to Mexico to lower costs.
Findings, however, suggest differently. The above mentioned report features a complete summary and history of NAFTA, its predecessors, and findings from studies regarding its impact.
The report goes on to provide an overview of the effects of NAFTA and the US Trade Trends with NAFTA Partners. Some of the findings were:
- US trade with its NAFTA partners has more than tripled since the agreement took effect
- In 2011, trilateral trade among NAFTA partners reached $1 trillion threshold
- Between 1993 and 2012, total US trade with Mexico increased by 506%
- In 2012, Canada was the leading market for US exports, while Mexico ranked second
- Canada and Mexico ranked second and third respectively as suppliers of US imports in 2012
Overall, the net effect of NAFTA on the US economy has been relatively small; however, it has contributed to varying effects across the board to all three countries by removing tariff and non-tariff barriers on items in the textile, automotive and agricultural industries.
You can access the full report and its findings by clicking here.