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NAFTA at 25

Twenty-five years ago yesterday – on January 1st, 1994 – NAFTA took effect. Contrary to much mythology, including that which is spread by Trump & Co., NAFTA has worked well. My intrepid Mercatus Center colleague Veronique de Rugy and I teamed up to write this short op-ed for Investor’s Business Daily on NAFTA’s 25th anniversary. A slice:

First, there’s no denying that the deal has successfully delivered a North American continent that is effectively duty-free. While some minor tariffs remain — Canadian taxes on dairy imports and U.S. duties on light trucks, for example — overwhelmingly, commerce flows freely throughout North America.

NAFTA also delivered a substantial increase in total trade and consolidated the position of Canada and Mexico as among the United States’ largest trading partners. In 2016, U.S. companies exported $262 billion to Mexico and more than $320 billion to Canada alone.

Surging cross-border investments have produced a sophisticated and highly efficient North American supply chain. Many corporations base their headquarters in North America to take advantage of the pro-growth trade conditions.

As for the impact on the U.S. workforce, there’s no evidence that NAFTA resulted in any net job losses, although there was — as always when trade patterns change — intense but very small competitive disruptions for certain U.S. industries.