Memorandum
320 Washington St.
Easton MA, 02375
27 April 2017
From: Caitlin Melaugh
Reply to: Caitlin Melaugh
To: US Trade Representative, Robert Lighthizer
Thru: The Office of the United States Trade Representative
Subject: The Importance of the North Atlantic Free
Trade Agreement
What
is NAFTA?
A. The
North Atlantic Free Trade Agreement is an agreement between Canada, the United
States, and Mexico. NAFTA began in 1994, and provides for many tariffs to be
eliminated from products traded between the countries. President George HW Bush
negotiated the trade agreement and President Clinton implemented it.
B. NAFTA
reshaped economic relations between the three countries, and helped North America
be a strong competitor in the global sphere.
a. This
agreement hoped to assist in Mexico’s economic growth in particular. Mexican
President at the time Carlos Salinas de Gortiari saw this agreement as a way
for Mexico to, “export goods, not people”.[1]
C. Mexico
and Canada have now become the two countries that the United States most
commonly exports to.
a. Estimates
conclude that about 200,000 jobs rely on direct trade with Mexico and Canada.[2]
b. On
the other hand, it is estimated that about 600,000 jobs have been lost due to
NAFTA’s implementation. However, with the change in times these jobs likely would
have disappeared anyways.
What
Does Trump Want?
A. Following
his inauguration Trump intended to reopen NAFTA to negotiations with Mexico and
Canada. He threatens to withdraw from the agreement for a, “better deal” for US
Companies.
B. Trump
has already withdrawn from the Trans Pacific Partnership deal. This deal had
not been ratified by congress yet but was negotiated by President Obama. Trump
argued that this would be harmful to US workers
a. Since
it was not ratified yet there will be no immediate effect on economic policies
upon withdrawal.
b. Since
Trump did not hesitate to withdraw from the TPP he would likely stick to his
word and withdraw from NAFTA if he saw necessary.
Why
Should We Keep NAFTA?
A. Economists
agree that NAFTA has benefited the North American economies since its creation.
Regional trade greatly increased.
a. Trade
increased from $290 billion in 1993 to $1.1 trillion in 2016.[3]
b. It
is difficult to decipher however, what other effects contributed to this
increase, such as the influence of technology development.
B. Economists
concluded that manufacturing in the United States was already struggling prior
to NAFTA, and it is not because of its implementation that there is trouble.
C. We
need to keep the more open barriers between Canada and Mexico for free trade
within North America. Prices of many goods will greatly increase with a withdrawal
from NAFTA.
D. It
is also important to keep friendly relations with our two border countries. With
NAFTA, we have a block of good relations within North America, but a withdrawal
could lead to not needing to keep up these good relationships, and future
conflict.
E. NAFTA
should be amended and updated for inclusion of current issues we face today
such as energy, border security, and immigration reform, but the United States
should not withdraw from NAFTA. The original agreement was created a very long
time ago and it should be regularly updated to include more current troubles
between the countries, but ultimately, an agreement of some sorts must be kept
with our two border countries for stability in the region.
a. A
complete withdraw would upend years of peaceful relations, and destabilize
alliances.
Thank you for your time.
Reference
Diamond, Jeremy, and Bash, Dana, “Trump Signs order
withdrawing from the TPP, reinstate ‘Mexico
City policy’ on abortion,” CNN Politics,
January 24, 2017. http://www.cnn.com/2017/01/23/politics/trans-pacific-partnership-trade-deal-withdrawal trumps-first-executive-action-monday-sources-say/
McBride, James,
and Aly Sergie, Mohammed, “NAFTA’s Economic Impact,” Council on Foreign Relations,
January 24, 2017. http://www.cfr.org/trade/naftas-economic-impact/p15790
[2] James McBride, and Mohammed Aly Sergie,
“NAFTA’s Economic Impact,” Council on
Foreign Relations, January 24, 2017. http://www.cfr.org/trade/naftas-economic-impact/p15790
[3] James McBride, and Mohammed Aly Sergie,
“NAFTA’s Economic Impact,” Council on
Foreign Relations, January 24, 2017. http://www.cfr.org/trade/naftas-economic-impact/p15790