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NAFTA Proponents Use Flawed Methods to Try to Hide Large NAFTA Trade Deficit

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During the fierce 1993 debate over the North American Free Trade Agreement (NAFTA), proponents made rosy promises of job creation – 170,000 jobs per year for the first five years of NAFTA – predicated on NAFTA improving the U.S. balance of trade with Canada and Mexico. Two decades later, the reality has been the opposite. Starting soon after NAFTA’s passage, the small pre-NAFTA U.S. trade surplus with Mexico turned into a massive new trade deficit, and the pre-NAFTA U.S. trade deficit with Canada expanded greatly. The new NAFTA trade deficit had already equated to an estimated net loss of one million U.S. jobs by 2004.  The 2016 the U.S. NAFTA deficit in goods reached $173 billion. Including goods and services trade, the combined U.S. trade deficit with Mexico and Canada rose (in inflation-adjusted terms) from $10 billion before NAFTA in 1993 to $136 billion in 2015 (the latest year of available services data).