MEXICO CITY – US Chamber of Commerce president and CEO Thomas J. Donohue said in an address on Monday in Mexico City that he was open to modernizing the North American Free Trade Agreement (NAFTA) as long as no trade barriers were erected that threatened the tens of thousands of jobs that depend on the trade pact.
“We welcome the opportunity to consider how to modernize the terms of trade between our countries to meet the realities of the 21st century. Remember, things like e-commerce and the digital economy didn’t even exist when NAFTA was negotiated more than two decades ago,” the business leader said.
Donohue, however, said “any efforts to modernize the deal must be done the right way.”
NAFTA, which created a free trade area among Canada, Mexico and the US, was signed in 1992 and took effect on Jan. 1, 1994.
“We must not disrupt the $1.3 trillion in annual trade that crosses our borders. Under NAFTA, Mexico and Canada are the top two US export markets in the world – by a long shot. The jobs of 14 million Americans depend on the agreement. It is crucial to our manufacturing and services sectors, to US farms, and to 125,000 American small- and medium-size businesses,” Donohue said.
The US Chamber of Commerce chief said that the goal should be to keep the parts of NAFTA that are working and overhaul those that are not.
“Using NAFTA’s amendment process, we can simplify and expedite these negotiations while preserving the many parts of the agreement that are working well,” Donohue said.
The business leader warned that incorporating protectionist elements into the negotiations to overhaul NAFTA would be harmful.
“Reverting to the high tariffs and other trade barriers that were in place before NAFTA could put at risk millions of jobs on both sides of the border. We must not allow that to happen,” Donohue said.
President Donald Trump has repeatedly railed against NAFTA, describing it as the worst trade deal the US has ever signed and vowing to rework it.
Trump, who has special powers to negotiate trade deals, must give the US Congress 90 days’ notice of his intent to revise an existing agreement, and his administration also must consult with the House Ways and Means Committee and Senate Finance Committee on its objectives in the talks.
Trump and his team say NAFTA has been disastrous for American workers because it encouraged US manufacturing companies to set up shop in Mexico to take advantage of cheaper labor costs, while at the same time leading to trade deficits with Mexico totaling roughly $60 billion annually.
“The truth is that a stronger US-Mexico partnership serves the interests of each of our countries and benefits all of our citizens through stronger growth,” Donohue said. “Our economic fates, our standing in the world, and the prosperity of our people are linked. We must continue to work together to secure them-as friends, neighbors, and partners do.”