The seventh round of the negotiations for the North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico will begin today in Mexico City, Mexico, and will continue until March 6.
The California Chamber of Commerce understands that NAFTA was negotiated more than 25 years ago, and, while our economy and businesses have changed considerably over that period, NAFTA has not. We agree with the premise that the United States should seek to support higher-paying jobs in the United States and to grow the U.S. economy by improving U.S. opportunities under NAFTA.
The provisions of the NAFTA with Canada and Mexico have been beneficial for American industries, agricultural enterprises, farmers, ranchers, energy companies and automakers. Any renegotiation of NAFTA must recognize the gains achieved and ensure that U.S. trade with Canada and Mexico remains strong and without interruption.
The CalChamber actively supported the creation of the NAFTA among the United States, Canada and Mexico, comprising 486.9 million people with combined annual trade with the United States being around $1.139 trillion in 2017. In 2017, goods exports totaled more than $525.46 billion while goods imports totaled nearly $614.02 billion.
The CalChamber’s long-standing support for NAFTA is based upon an assessment that it serves the employment, trading and environmental interests of California and the United States, as well as Canada and Mexico, and is beneficial to the business community and society as a whole. Since 1993, trade among the three NAFTA countries has nearly quadrupled.
Mexico continues to be California’s No. 1 export market, purchasing 15.5% of all California exports. California exports to Mexico amounted to $26.7 billion in 2017, an increase from 2016. Computers and electronic products remained California’s largest exports, accounting for 22% of all California exports to Mexico. Exports of transportation equipment and machinery from California to Mexico grew to total more than $5.68 billion, with chemicals continuing to be a strong export sector as well.
Canada remained California’s second largest export market, with California exports to Canada increasing to top $16.77 billion in 2017. Canada purchases more than 9.7% of all California exports. Computers and electronic products remained California’s largest exports to Canada, accounting for more than 30% of all California exports to Canada. California exports to Canada directly and indirectly support approximately 110,000 jobs in California, with many of those resulting from export growth under NAFTA.
Globally, no markets have bigger impacts on California’s tourism economy than Mexico and Canada. In 2016, travelers from Mexico spent $3.2 billion in California, while Canadians spent more than $2 billion.
Goals of NAFTA
The goals of NAFTA are to eliminate trade barriers and facilitate movement of goods and services across borders, promote fair competition, increase investment opportunities, provide protection and enforcement of intellectual property rights, create procedures for trade disputes, and establish a framework for further trilateral, regional, and multilateral cooperation to expand the trade agreement’s benefits.
The United States should be committed to a swift and efficient NAFTA renegotiation. Global trade is crucial to the world economy, and trade agreements are an integral part of that success.
Now that the renegotiation process is underway, CalChamber urges a quick and efficient process, and one that does not hinder ongoing trade and investment among the three NAFTA members who must be kept united in the same end-goal of a successful renegotiation. As this process continues, the Trade Promotion Authority (TPA) with its objectives and procedures should be followed.
TPA legislation establishing strong rules for trade negotiations and congressional approval of trade pacts, and delivering trade agreements that boost U.S. exports and create American jobs, was approved in June 2015.
TPA is set to expire on July 1, 2018. Under the TPA law passed in 2015, the President has to request a three-year renewal, basically to give Congress the opportunity to take it away by passing a resolution of disapproval. If the White House doesn’t request an extension of TPA by April 1, 2018, however, it also would lapse.
The CalChamber is asking members to send a letter to their congressional representatives via our grassroots system.
Staff Contact: Susanne T. Stirling