Critics of Trade Promotion Authority (TPA) argue that this legislation is putting America on the path to outsourcing. According to this narrative, the 1994 North American Free Trade Agreement (NAFTA) devastated American industries, and new trade agreements will do the same. The truth is NAFTA encouraged trade between Canada, Mexico, and the US. If anything, it should be evidence for TPA.
In the 21 years since NAFTA has been in effect, trade with Canada and Mexico has risen by almost 350 percent to $1.2 trillion. Today, the two countries buy almost one-third of US exports, and this trade supports almost 14 million jobs. More broadly, 46 percent of US exports went to one of 20 free trade partners despite these partners not including economic powerhouses such as China, India, Japan, Germany, and the United Kingdom.
Critics of trade rely on the myth that NAFTA lead to outsourcing. However, a report by the Heritage Foundation debunks this claim. Manufacturing output in the US has increased: workers earn more, and they are more productive. Most of the jobs that were outsourced from the US went to Asia, which was not even involved in NAFTA.
The fact is, TPA should not be controversial at all. Congress has delegated trade authority to the President since 1934, and has granted TPA to Republican and Democrat Presidents five times over the past 30 years. The current version of TPA contains some of the strongest oversight provisions ever and it ensures that Congress will always have the final say. Agreements like the Trans-Pacific Partnership and NAFTA should not even be part of the TPA debate. With or without TPA, trade agreements still have to be approved by Congress.
But if TPA is not passed, the US will fall behind its competitors. In total there are over 400 free trade agreements in the world, but the world’s largest economy is part of only 14. In contrast, the EU has agreements with over 50 countries. As a result, the EU is the top trading partner for 80 countries while the US is the top trading partner for just over 20 countries. Now, developing countries like China are beginning to catch up to the US. China has 11 agreements with 18 countries.
The potential benefits of trade cannot be ignored. 234 countries and territories purchase American goods and services. Passing TPA will put the US on a path to reducing barriers with many of these countries that will allow American innovators to thrive.