2. U.S. Department of Commerce (2003), Table 56 and IMF (2003). This calculation compares all U.S. exports to Mexico, as reported by the United States, with total imports from Maquiladora plants, as Reported by Mexico. Third, THE stronger growth of NAFTA has created jobs. According to a 2010 report, U.S. free trade agreements – most of which came from NAFTA – directly supported 5.4 million jobs, while trade with those countries supported 17.7 million. In fact, NAFTA has helped the U.S. auto sector compete with China, Hanson says. By contributing to the development of cross-border supply chains, NAFTA has reduced costs, increased productivity and improved U.S.
competitiveness. That meant losing a few jobs in the United States, since jobs were relocated to Mexico, he said, but without the pact, we could have lost even more. “Because Mexico is so close, you can have a regional industrial cluster where goods can come and go. Manufacturing in all three countries can be very integrated,” says Hanson. These links, which have given U.S. automakers an advantage over China, would be much more difficult to achieve without NAFTA tariff reductions and intellectual property protection. NAFTA has long been a political objective. In 2008, then-Presidential candidate Barack Obama responded to widespread trade skepticism within the Democratic base by promising to renegotiate NAFTA to incorporate stricter labor and environmental standards. The Obama administration tried to address NAFTA issues during the Trans-Pacific Partnership negotiations, a massive trade agreement with 11 other countries, including Canada and Mexico.
The TPP was deeply unpopular – Hillary Clinton ultimately opposed the deal during her 2016 presidential bid – and President Trump withdrew the United States from the TPP in one of his first official acts. There is broad agreement among economists that NAFTA has benefited North American economies. Regional trade increased sharply in the first two decades of the treaty, from some $290 billion in 1993 to more than $1.1 trillion in 2016. Cross-border investment has also increased and U.S. direct investment (FDI) in Mexico has increased from $15 billion to more than $100 billion during this period. But experts also say it has proved difficult to highlight the direct impact of the agreement from other factors, including rapid technological change and expanded trade with countries such as China. In the meantime, discussions continue on the impact of NAFTA on employment and wages. Some workers and industries have faced painful disruptions due to the loss of market share due to increased competition, while others have benefited from the new market opportunities that have been created.