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Tom Donohue: NAFTA Provides a Foundation for North American Progress

In the 20 years since the North American Free Trade Agreement cemented the commercial relationship among the United States, Canada and Mexico, NAFTA has propelled an explosion in trade, jobs and growth, and enhanced the competitiveness of all three countries. Twenty years of facts, experiences and benefits have proven conclusively that the NAFTA critics were wrong.

Last week the U.S. Chamber of Commerce released NAFTA Triumphant, a report that details the agreement’s many benefits. Since NAFTA entered into force in 1994, trade with Canada and Mexico has more than tripled, reaching $1.2 trillion in 2011. Each day the United States conducts more than $3.2 billion in trade with its two closest neighbors.

Our study found that North American trade supports a net total of nearly 14 million U.S. jobs, and trade unleashed by NAFTA supports tens of thousands of jobs in every single state. NAFTA has also been a bonanza for U.S. farmers and ranchers, substantially expanding U.S. agricultural exports to Canada and Mexico. One in every 10 acres on American farms is planted to feed hungry Canadians and Mexicans.

NAFTA has raised the competitiveness of U.S. manufacturers, which added more than 800,000 jobs in the four years after NAFTA entered into force. Canadians and Mexicans purchased $428 billion of U.S. manufactured goods in 2011, generating $36,000 in export revenue for every American factory worker.

These findings soundly debunk the myth that NAFTA has contributed to unemployment. In fact, the U.S. unemployment rate was sharply lower in the years following NAFTA implementation. The jobless rate averaged 5.1 percent from 1994 to 2007 — compared with 7.1 percent from 1982 to 1993, the years leading up to NAFTA.

In short, NAFTA has supported millions of good jobs, raised standards of living, and made businesses more efficient, productive and competitive.So what’s next for this extraordinary partnership?

Our greatest opportunity is establishing North America as a 21st-century energy hub. When you add up the potential of all three countries, North America’s energy resources are staggering. We need to tear down barriers to production and facilitate the smooth flow of energy across borders so that it gets to where it is needed in the most cost-efficient manner possible.

Capitalizing on this opportunity will strengthen our economies, add jobs, and enhance North American energy security and global competitiveness.

Our nations sometimes compete and sometimes disagree, but we are bound together by an extraordinary opportunity to generate even more prosperity across North America.

— Tom Donohue is president and CEO of the U.S. Chamber of Commerce.

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