Manufacturing workers depend on NAFTA
© Getty Images

Today, North American manufacturers and workers participate in the most vibrant commercial market in the world, thanks in large part to the North American Free Trade Agreement (NAFTA).

For more than 20 years, NAFTA has provided the United States, Canada and Mexico with a level of mutual market access that has produced significant economic gains for manufacturers, manufacturing workers, their families and communities.

ADVERTISEMENT
As CEO of a company with operations in all three NAFTA nations, I’ve seen the benefits of this trade agreement first-hand. The integrated market zone created by NAFTA established an open, multilateral environment for investment and innovation — generating new opportunities for companies like ours to expand their businesses, offer good jobs and wages and support local communities.

 

The North American trade zone has flourished under NAFTA. In the United States alone, exports to Canada and Mexico have more than tripled since NAFTA went into effect in 1994, rising from $129 billion in 1993 to $446 billion in 2016. In fact, Canada and Mexico bought one-fifth of all U.S.-manufactured goods produced in 2016 — more than the next 10 U.S. trading partners combined.

Jobs have been another huge benefit. Goods manufactured in the United States and exported to Canada and Mexico support the jobs of more than 2 million men and women at more than 43,000 manufacturing companies across the United States. Let me repeat that figure: 2 million jobs.

Of course, no trade agreement is perfect — and none can last forever without improvement or change. NAFTA was put into place nearly a quarter-century ago, well before major technological advances transformed the manufacturing sector. Moreover, manufacturers still face some barriers to trade as the world outside of the NAFTA nations has grown and developed.

The time has come to renegotiate and modernize NAFTA. But we cannot abandon the agreement outright. We need to preserve the positive advances of the last 20 years. We need to build on NAFTA’s success, and make improvements that take into account a new and changing global environment.

The manufacturing industry and the National Association of Manufacturers are committed to working with the Trump administration and stakeholders across the United States, to make sure that a modernized NAFTA maintains and improves the market access that has benefited and supported manufacturing workers.

That means eliminating remaining distortions and trade barriers that constrain market access. It means raising standards with science-based regulatory practices, ensuring transparency and protecting intellectual property so that all manufacturers can compete on a level playing field. It means including new digital trade provisions that are vital to small manufacturers and critical to anyone who creates and relies on new technologies.

It means cutting red tape and streamlining regulations, so that companies are judged on the worth of their products and not their ability to navigate a sea of bureaucracy. It means ramping up our commitment to greater collaboration between the United States, Canada and Mexico to strengthen our regional position and leverage in the global market.

And it means strong enforcement, including for the protection of private property invested overseas. The existing NAFTA investor-state dispute settlement process needs to be updated to ensure full enforcement against foreign government seizure, theft and mistreatment of investments. It needs to be revised to promote fairer treatment of our companies.

Throughout the history of this trade pact, the manufacturing industry has championed NAFTA because it’s good for our companies, good for our workers and good for our countries. In the United States, NAFTA has helped to drive manufacturing job creation and improve the global competitiveness of U.S. manufacturing at a time when an outdated tax code and onerous regulations discourage investment in U.S. manufacturing.

NAFTA is critically important to millions of manufacturing workers across the United States, as well as in Canada and Mexico. And that’s something our policymakers need to remember if manufacturers are going to continue to play a key role in ensuring our mutual prosperity.

David MacLennan is the Cargill chairman and CEO, and serves as vice chairman of International Economic Policy at the National Association of Manufacturers (NAM).


The views expressed by contributors are their own and not the views of The Hill.