The Trump administration’s deal to replace NAFTA will boost the U.S. economy by 0.35 percent and lead to 176,000 new jobs in the sixth year after implementation, according to an analysis by an independent government panel that offered ammunition for both supporters and opponents of the new agreement.
The report, released April 18 by the International Trade Commission, is a procedural step required under the so-called Trade Promotion Authority law. Lawmakers will use the analysis as they consider whether to support the U.S.-Mexico-Canada Agreement, which the three countries signed last year and which still needs congressional approval.
“The model estimates that the agreement would likely have a positive impact on all broad industry sectors within the U.S. economy,” the report stated. “Manufacturing would experience the largest percentage gains in output, exports, wages and employment, while in absolute terms, services would experience the largest gains in output and employment.”
The ITC estimated that USMCA would increase U.S. exports to Canada by $19.1 billion and boost shipments to Mexico by $14.2 billion. American imports would increase by $19.1 billion from Canada and $12.4 billion from Mexico, according to the report.
Ag groups reacted to the report with renewed support for ratification of the USMCA.
“NPPC supports ratification of USMCA, an agreement that preserves zero-tariff access to markets that represent more than 30% of total U.S. pork exports,” Nick Giordano, National Pork Producers Council vice president, said in a news release from the group.
But “we are eager to see the removal of U.S. metal tariffs that prompted Mexico’s 20% retaliatory tariffs nearly a year ago. Members of Congress have said that ratification of USMCA will be delayed and the benefits of the agreement diluted as long as this trade dispute goes unresolved.”
Giordano reported the value of U.S. pork exports to Mexico are down 32% this year due to punitive tariffs.
“Our farmers need zero-tariff trade restored to our largest export market,” he said.
National Corn Growers Association President Lynn Chrisp called the release of the ITC report an important step.
“ITC reports typically measure the economic impact of new trade agreements and focus on market access. USMCA is different — it’s an update to the North American Free Trade Agreement (NAFTA) — which already eliminated most tariffs on exports of U.S. food and agriculture products,” Chrisp said in a news release. “So, the ITC report released today doesn’t fully capture the economic benefits of trade with Canada and Mexico, nor the improvements to trade rules in USMCA that benefit agriculture.
“NAFTA has been a resounding success for agriculture. In 2016 alone, American corn growers exported $3.2 billion in corn and corn co-products to Mexico and Canada. USMCA secures and builds upon this important partnership, which is why ratifying USMCA is so important for agriculture.”