March 29, 2024

Trump’s Nafta Revisions Offer Modest Economic Benefits, Report Finds

Kevin Hassett, the chairman of the president’s Council of Economic Advisers, said he believed that the report had underestimated some of the deal’s economic benefits, including provisions on intellectual property. But he said he was encouraged.

“I think that should be reassuring to anyone who is on the fence on this bill,” he said.

Since negotiations began in August 2017, the administration has secured some substantive changes to Nafta, including modernizing protections on digital trade, adding labor and environmental protections, opening up the Canadian dairy market and adding rules to restrict governments from manipulating their currency.

Many of the changes have been updates to Nafta’s existing framework. Other improvements were drawn from the Trans-Pacific Partnership. Mr. Trump withdrew the United States from that agreement days after taking office, before Congress could act on it.

The Trump administration has also tightened regulations on how cars are manufactured — for example, raising the percentage of a vehicle that needs to be made in North America for it to be tariff-free — to encourage automaking in the United States.

The commission’s report projected that rule changes in the automotive sector would result in many of the largest economic changes from the pact. It estimated that rules meant to bolster American automotive manufacturing would add more than 28,000 jobs and increase investment by $683 million per year.

But by raising the cost of producing cars, the auto provisions would actually reduce American car exports and weigh on the economy over all, the report said.

Those figures clashed with a rosier analysis of the automotive effects of the deal released by the Trump administration. Based on information provided by North American automotive manufacturers, Mr. Lighthizer’s office estimated Thursday that the rule changes would result in $34 billion in investments in the United States, as well as $23 billion in annual purchases of American-made parts and 76,000 American jobs, all within five years.

Article source: https://www.nytimes.com/2019/04/18/business/economy/trump-nafta-trade.html?partner=rss&emc=rss

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