An oft-criticized trade agreement actually has benefited Utah and should be expanded rather than weakened, according to a national business organization.
Business Roundtable says the North American Free Trade Agreement (NAFTA) led to Utah exporting $3.1 billion of goods and services in 2015 to Canada and Mexico, and trade with those two nations supported 121,300 jobs in the Beehive State.
NAFTA has delivered growth for the Utah economy and jobs across the state, according to a 50-state economic analysis produced by Business Roundtable.
“The numbers make it clear that Utah workers and business have benefited from NAFTA,” said Tom Linebarger, chairman and chief executive officer of Cummins Inc. and chairman the Business Roundtable International Engagement Committee. “Successful negotiations should expand on, and not diminish, the many benefits NAFTA already provides.”
The roundtable sent a letter in May to President Trump, outlining its priorities for the NAFTA negotiations to benefit the U.S. economy and American businesses, workers and consumers. However, speaking in Phoenix last week, Trump described NAFTA as “one of the worst deals that anybody in history has ever entered into” and said the U.S. has begun formal renegotiation with Mexico and Canada on the agreement. He pledged to renegotiate NAFTA or terminate it.
“Personally, I don’t think we can make a deal,” Trump said, adding that both Canada and Mexico had fared well under NAFTA. “I think we’ll end up probably terminating NAFTA at some point. Probably.”
The report indicates that Utah’s goods exports to Canada and Mexico have increased by 104 percent since 2006, reaching $2.4 billion in 2015, and that its services exports to those nations have grown by 55 percent since then, reaching $757 million. In 2015, manufacturers and farmers used 86 percent of imports from Canada and Mexico as inputs to produce goods that are more competitive in U.S. and foreign markets, the report states.
“Utah has a real economic stake in negotiations to modernize NAFTA,” the report states. “For more than two decades, NAFTA has supported jobs and the economy in Utah.”
The report indicates that 96 percent of Utah’s iron, steel and ferroalloys exports, totaling $46 million, were sent to Mexico and Canada in 2015. Canada received the vast majority. Eighty-four percent of Utah coal exports, totaling $143 million, went to those two nations that year, with Mexico being the primary recipient. Mexico also led the way importing Utah motor vehicle parts, accounting for 76 percent of those exports, which totaled $288 million.
The report shows that international trade and investment supports jobs and economic growth in every state, now supporting a total of 41 million U.S. jobs. It also said that U.S. trade-related employment grew three-and-a-half times faster than total U.S. employment between 2004 and 2014. Globally engaged U.S. companies had 23.3 million U.S. workers in 2013, the most recent year for which data are available. They paid average annual compensation of $78,000, which is 40 percent higher than the average $56,000 annual compensation paid to workers employed by other U.S. businesses.
Business Roundtable CEO members lead companies with nearly 15 million employees and more than $6 trillion in annual revenues. The combined market capitalization of Business Roundtable member companies is the equivalent of nearly one-fourth of total U.S. stock market capitalization.