NAFPA Still Boon to Manufacturing 50 Years Later

NAFTA Still Boon to Manufacturing 50 Years Later

May 1, 2014

U.S.-NAFTA exports of manufactures grew by 52% from 2009 to 2013 compared with 34% to the rest of the world, raising NAFTA exports to 35% of global exports.

Adrienne Selko

North American free trade has proven to be a resounding success for U.S. manufacturing, according to a new report from the Manufacturers Alliance for Productivity and Innovation (MAPI), NAFTA: A 50-Year Success Story for U.S. Manufacturing.

Economic integration among the three democracies based on private sector–driven free trade and market-based currencies has had substantial benefits for U.S. manufacturing, according to Ernie Preeg, senior advisor, MAPI

Preeg lists a number of key statistics as examples:

U.S.-NAFTA exports of manufactures grew by 52% from 2009 to 2013 compared with 34% to the rest of the world, raising NAFTA exports to 35% of global exports;
U.S. manufactured exports to Canada and Mexico of $407 billion in 2013 were more than five times as large as the $76 billion of exports to China;
Seventy-seven percent of U.S.-NAFTA merchandise exports in 2013 were manufactures and almost half of services exports were business services deeply integrated with the manufacturing sector;
The $23 billion NAFTA surplus in manufactures in 2013 stands in dramatic contrast with the $524 billion deficit with the rest of the world, including $351 billion with China; and
U.S.-NAFTA exports of business services, while only one-tenth of manufactures, were more than double imports.

"The hallmark has been bold and forward-looking leadership by all three governments in the face of protectionist opposition and vested interest, " Preeg said. "The NAFTA relationship is of growing importance for U.S. trade and investment."

Preeg also describes three decisive and overlapping challenges that lie ahead: reform in Mexico to more competitive and productive private investment, including the end of the Pemex state oil monopoly; a North American energy strategy to become a large net exporter of fossil fuels; and an active NAFTA role for restoring the multilateral trade and financial systems, which Preeg argues have deteriorated greatly since 2000.

“NAFTA has been an extraordinary success story,” Preeg concludes. “Work remains, however, to consolidate and improve the North American free trade relationship, and the three nations can and should act together to pursue their global economic interests.”

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About the Author

Adrienne Selko | Senior Editor

Focus: Workforce, Talent

Follow Me on Twitter: @ASelkoIW

Bio: Adrienne Selko has written about many topics over the 17 years she has been with the publication and currently focuses on workforce development strategies. Previously Adrienne was in corporate communications at a medical manufacturing company as well as a large regional bank. She is the author of Do I Have to Wear Garlic Around My Neck? which made the Cleveland Plain Dealer's best sellers list. She is also a senior editor at Material Handling & Logistics and EHS Today.

Editorial mission statement: Manufacturing is the enviable position of creating products, processes and policies that solve the world’s problems. When the industry stepped up to manufacture what was necessary to combat the pandemic, it revealed its true nature. My goal is to showcase the sector’s ability to address a broad range of workforce issues including technology, training, diversity & inclusion, with a goal of enticing future generations to join this amazing sector.

Why I find manufacturing interesting: On my first day working for a company that made medical equipment such as MRIs, I toured the plant floor. On every wall was a photo of a person, mostly children. I asked my supervisor why this was the case and he said that the work we do at this company has saved these people’s lives. “We never forget how important our work is and everyone’s contribution to that.” From that moment on I was hooked on manufacturing.

I have talked with many people in this field who have transformed their own career development to assist others. For example, companies are hiring those with disabilities, those previously incarcerated and other talent pools that have been underutilized. I have talked with leaders who have brought out the best in their workforce, as well as employees doing their best work while doing good for the world.