Modest Projections in Today’s ITC Assessment of the Revised NAFTA Do Not Alter Its Prospects in Congress
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Note: The U.S. International Trade Commission (ITC) today released a study on the potential economic impact of the revised North American Free Trade Agreement (NAFTA) that projects minuscule economic gains in real GDP of $68.2 billion, or 35/100 of one percent. The highest projected gains in wages, employment and output are all less than one-half of one percent – with most figures much lower. Undergirding a large share of those tiny gains is an assumption that locking in lengthy intellectual property monopolies and freezing environmental and consumer safeguards leads to economic gains and no downsides. The report projects that over time, the agreement would add 175,800 jobs, which is less than one-fifth of what the U.S. government has certified as lost to the original NAFTA. Public Citizen will soon release a detailed summary of findings. [UPDATE: findings available here]
“The minuscule projected gains in this long-awaited official government assessment contradict Donald Trump’s grandiose claims that it will lead to ‘cash and jobs pouring into the U.S.’ and reinforces congressional Democrats’ views that absent more improvements, the revised deal won’t stop NAFTA’s ongoing damage.
The ITC’s past trade-pact projections have been so entirely wrong — in direction, not just in scale — that today’s findings of minuscule gains would have limited effect on the debate had Trump not set such a high bar by overselling this as a new species of trade deal that would miraculously reverse NAFTA’s decades of damage.
This report does nothing to alter the reality that the prospects for a NAFTA 2.0 vote rely largely on whether the administration engages with congressional Democrats and then with Canada and Mexico to improve the text signed last year. That congressional Democrats, unions and others who have outright opposed past pacts seek improvements rather than the deal’s demise reveals there is a path to build broad support. But absent removal of new monopoly protections for pharmaceutical firms that lock in high drug prices and strengthened labor and environmental standards and enforcement, the deal is not likely to garner a majority in the U.S. House of Representatives. Indeed, all four of the trade deals Congress enacted in the past decade required changes to their texts after the pacts were signed in order to pass the House.”