ITC Estimates New NAFTA Will Add .35% to GDP
The International Trade Commission released its estimate of the economic effect of revisions to NAFTA, one of the steps necessary for a vote in Congress under Trade Promotion Authority. Because there are few tariff changes in the U.S.-Mexico-Canada Agreement, economists focused on the advances in digital trade and job growth due to tighter auto rules of origin. Across the economy, the ITC estimated that ratifying USMCA would lead to an additional 176,000 jobs, a 0.12 percent increase.
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Senate Finance Committee Chairman Chuck Grassley told reporters April 18, before the report was released, that he didn't think its conclusions would change the conversation in Congress around ratification.
The revised NAFTA would increase trade with Mexico and Canada by about 5 percent, the ITC estimated. There would be $19.1 billion more exports to Canada and $19.1 billion more imports from Canada. There would be $14.2 billion more exports to Mexico and $12.4 billion more imports from Mexico. All these changes would happen by year six after ratification. There are five years of transition for the auto rules of origin.