James T. Brett: New England has benefited greatly from NAFTA

  The Canada Border Inspection Station at Stanstead, Quebec, just across the border from Derby Line, Vt.

The Canada Border Inspection Station at Stanstead, Quebec, just across the border from Derby Line, Vt.

From The New England Council (newenglandcouncil.com)


Over the past 18 months, we have seen a marked shift in U.S. trade policy. Soon after taking office, President Trump made good on his campaign promise and announced that the U.S. would seek to renegotiate the North American Free Trade Agreement (NAFTA,) a multilateral agreement with Canada and Mexico that was put into effect in 1994. In more recent months—amid reports that NAFTA talks have grown contentious and that the U.S. is considering withdrawing altogether — the administration announced tariffs on certain imports that directly affect our neighbors to the immediate north and south.

Canada and Mexico are not only important allies, they are significant economic partners for the U.S., and for the New England states in particular. As the voice of the region’s business community, The New England Council believes it is of critical importance that the U.S. continue to work toward a modernized NAFTA, and that the administration should reconsider the tariffs against our partners in Canada and Mexico.

The impact of trade with Canada and Mexico on the New England economy cannot be understated. According to the U.S. Department of Commerce, Canada is the premier goods export market for businesses in five of the six New England states — in the sixth state, it is the second-largest market — representing more than $8.3 billion in exports in 2017 alone. Canada estimates that in 2017, service exports from our six states totaled nearly $3.3 billion. Mexico is also a top trade partner for our region, with three states counting our southern neighbor as their second- or third-ranking export market for goods. The region exported $4.4 billion worth of goods to Mexico in 2017, and remains a significant multibillion-dollar market for goods produced in Mexico. Data from the International Trade Administration indicates some 10.7 million American jobs are supported by goods and services exports, and it is doubtless that tens of thousands of New England jobs rely upon trade with Canada and Mexico.

The tariffs that President Trump has put into place are already having a significant impact here in New England. The U.S. Chamber of Commerce recently released a state-by-state analysis of the impact of the emerging trade war on U.S. exports. According to the report, as a result of the administration’s tariffs, $11 million in New Hampshire exports to Canada are targeted for retaliation, and close to $1 million in exports to Mexico are targeted for retaliation. Some of the hardest hit products include steel and aluminum products, lighting products, and certain foods. In total, nearly $2.7 billion in New England exports to Canada and Mexico face retaliation.

It is certainly appropriate to revisit and update major trade agreements. Some elements of our economy did not even exist at the time NAFTA was first negotiated, and we commend the administration for taking steps to modernize this historic agreement. At the same time, the President is right to be concerned about trade imbalances and to seek ways to minimize trade deficits. However, given the importance of trade with these two nations, it is gravely concerning that the administration would even suggest withdrawing from NAFTA. Further, the evidence laid out by the U.S. Chamber’s new report suggests that the tariffs are most certainly not serving our nation’s best interests, and could harm disparate and unrelated sectors of our economy.

It is understandable that partners and neighbors, on occasion, can have temporary disagreements over policy considerations, including on trade matters. However, The New England Council believes it is crucial that the playing field remain open for businesses, workers, and families across New England, so that they — through no fault of their own — are not disadvantaged by potential retaliatory trade measures or a defunct NAFTA.

James T. Brett is the president and CEO of the New England Council.