Explanation:
6 Benefits of NAFTA
1. Quadrupled Trade.
2. Lowered Prices.
3. Increased Economic Growth.
4. Created Jobs.
5. Increased Foreign Direct Investment.
6. Reduced Government Spending.
USMCA.
Quadrupled Trade
Between 1993 and 2019, trade between the three members quadrupled from $290 billion to $1.23 trillion.5 6 That boosted economic growth, profits, and jobs for all three countries.7 It also lowered prices for consumers.
. Lowered Prices
Lower tariffs also reduced import prices. That lessened the risk of inflation and allowed the Federal Reserve to keep interest rates low.
Increased Economic Growth
NAFTA boosted U.S. economic growth by as much as 0.5% a year.18 The sectors that benefited the most were agriculture, automobiles, and services.
Created Jobs
Some sources say that NAFTA exports created 5 million net new U.S. jobs.27 Most of those jobs went to 17 states, but all states saw some increases. U.S. manufacturers added more than 800,000 jobs between 1993 and 1997. Manufacturers exported $487 billion in 2014. It generated $40,000 in export revenue for each factory worker.
Increased Foreign Direct Investment
Since NAFTA was enacted, U.S. foreign direct investment (FDI) in Canada and Mexico has more than tripled to $500.9 billion. In 2017, U.S. investors poured $391.2 billion into Canada and $109.7 billion into Mexico.2524 That boosted profits for U.S. businesses by giving them more opportunities to develop and markets to explore.
Reduced Government Spending
NAFTA allowed firms in member countries to bid on all government contracts.29 That created a level-playing field for all companies within the agreement's borders. It cut government budget deficits by allowing more competition and lower-cost bids.
USMCA
Despite these advantages, the United States, Mexico, and Canada renegotiated NAFTA on Nov. 30, 2018.30 The new deal is called the United States-Mexico-Canada Agreement. (USMCA) Mexico ratified the agreement in 2019. The agreement was signed by Donald Trump on Jan. 29, 2020. Canada's Parliament ratified it on Mar. 13, 2020.
