Washington ~ The Coalition for a Prosperous America said today that withdrawal from the North American Free Trade Agreement (NAFTA) is likely to boost stock prices, employment and economic growth.
Republican Senators told the White House (subscription required to view link) earlier this week that NAFTA withdrawal will harm the stock market. CPA says that claim is based on outdated, incorrect views on trade and investment.
“America’s economy and wages grew faster before the modern trade agreement era. But our manufacturing members saw substantial growth last year in part because of trade agreement uncertainty and a new focus from business on finding sources of supply within the US,” said Michael Stumo, CEO of CPA. “The new approach is raising production and employment at US manufacturers. Their biggest problem now has become finding skilled workers to meet new demand.”
Trade uncertainty is good for manufacturers and jobs in the industrial heartland because investment in, and procurement from, US suppliers is a better business bet. Toyota and Mazda, for example, are jointly investing in a new US plant, while reducing the size of a Mexican factory, because access to the US consumer market will be unaffected in the event of a NAFTA withdrawal by the Trump administration.
“Reducing the trade deficit with Mexico will boost the US economy and improve job creation because more products will be made in the US,” said Jeff Ferry, CPA Research Director. “That improvement will benefit US corporate profits and the stock market, not harm them. The biggest problem currently faced by the US economy is that too much demand from US consumers leaks overseas to create jobs in other countries rather than here.”
"We at CPA have seen no credible research showing harm from NAFTA withdrawal," continued Stumo. "Even Goldman Sachs found, in a recent report, that NAFTA withdrawal would not negatively impact the US economy. We are in a global competition for good jobs and innovation. It is not in our national interest to create investment certainty in other countries."
About CPA: The Coalition for a Prosperous America is the nation’s premier organization working on the intersection of trade, jobs, tax, and economic growth. We represent the interests of 4.1 million households through our agricultural, manufacturing, and labor members.
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