Business Roundtable released a 50-state economic analysis this week that shows the effects of terminating the North American Free Trade Agreement and re-imposing tariffs on exports and imports.
Not surprisingly, despite the Trump administration’s rhetoric about the agreement, abandoning NAFTA would not help the U.S. economy. Commerce Secretary Wilbur Ross said this week that exiting NAFTA is “definitely a possibility.”
Business Roundtable’s analysis shows that exiting the agreement would result in a net loss of 1.8 million American jobs.
“Terminating NAFTA would permanently reduce U.S. employment, exports, and economic output, while benefiting our economic competitors at the expense of American workers and businesses,” said Joshua Bolten, president and CEO of Business Roundtable, an association of chief executive officers of America’s leading companies. “We urge the Administration to take into account the potential damage of withdrawing from NAFTA, and to focus instead on modernizing the agreement so that it remains a cornerstone of American prosperity.”
The impact on New York would be significant. The analysis looks at the effects on state exports and state employment using two different scenarios. Even in the more forgiving scenario, New York would suffer.
The analysis showed that:
- New York’s business exports to Canada and Mexico would decline by more than $3.2 billion.
- New York’s total output would decline by more than $9.9 billion.
- And New York would lose 117,083 jobs within a year.
NAFTA, and other trade agreements, have definite flaws but are not inherently bad. Rather than tearing them up completely, the administration should be working on negotiations to strengthen the benefits they offer while mitigating their drawbacks.
If America pulls out of its deal with Canada and Mexico, other countries will gladly step into the void to work with our nearest neighbors. If the Trump administration pulls out of NAFTA because it can’t negotiate a deal that officials are 100 percent happy with, it will hurt the U.S. economy and benefit countries like China.