Trade

Government report says new NAFTA would have minimal impact on economy

President Trump's update of the North American Free Trade Agreement (NAFTA) would provide a very modest boost to the economy, according to a report released Thursday by the U.S. International Trade Commission (ITC).

 

The United States-Mexico-Canada Agreement (USMCA) would increase economic growth by 0.35 percent, or $68.2 billion, and create 175,700 jobs, the government agency projected.

 

Wages would rise 0.27 percent, and the largest increases would be in manufacturing and mining, with the average wage climbing 0.43 percent among lower-educated workers.

 

U.S. trade with Canada and Mexico would increase and reduce the trade deficit with Mexico by $1.8 billion under the agreement. Exports to Mexico would get a $14.2 billion boost, compared with $12.4 billion in new imports.

 

The bilateral trade deficit with Canada would stay the same, with $19.1 billion in new exports countering $19.1 billion in imports.

 

"I'm glad to see the report recognized USMCA's new economic benefits," said Senate Finance Committee Chairman Chuck Grassley (R-Iowa), noting the trade deal's focus on reducing nontariff barriers.

 

Democrats, meanwhile, said the ITC report shows the trade deal would do little to improve economic conditions for American works.

 

"This report confirms what has been clear since this deal was announced - Donald Trump's NAFTA represents at best a minor update to NAFTA, which will offer only limited benefits to U.S. workers," said Sen. Ron Wyden (Ore.), the top Democrat on the Finance Committee.

 

Democrats are pushing for tougher trade enforcement mechanisms to address labor standards. Speaker Nancy Pelosi (D-Calif.) said Mexico would have to reform its labor laws before she would consider bringing the trade deal to a vote in the House.

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