‘New NAFTA’ is good for New Hampshire’s economy
New Hampshire exports $1.1 billion in goods and $343 million in services to our North American neighbors, which is why Congress should quickly ratify the new North American trade agreement among the three countries.
The United States Mexico Canada Agreement (USMCA), sometimes referred to as “the New NAFTA,” has been agreed to by the Trump administration but requires ratification by the legislative branch. Implementation is critically important to our state’s economy. There are many New Hampshire businesses that import and export with both nations.
According to the latest available numbers from the Office of the United States Trade Representative, New Hampshire exported $577 million in products to Canada and $481 million to Mexico in 2017, our two leading trade partners.
Almost a third of our trade is in computer and electronic products. There’s also machinery, transportation and electronic equipment, and fabricated metal products. Other goods from New Hampshire traded north and south of the border include plastics and rubbers, processed food, chemicals and scrap. That’s a diverse portfolio!
The numbers show that trade with our partners has been good for New Hampshire’s economy. For example, according to the U.S. Department of Commerce, the export of communications equipment from New Hampshire to Canada and Mexico increased by 20% in the last decade. The state’s aerospace exports to our neighbors have doubled in the same time period.
Today, one out of four New Hampshire manufacturing firms do business in Canada and Mexico. Some 74% are small- and medium-sized businesses. In total, there are more than 3,500 jobs in the state that are dependent on North American exports. These are jobs that are typically full time, pay higher-than-average wages and offer real career opportunities.
The “New NAFTA” also prepares the United States for the 21st century trade market. It modernizes intellectual property protections and sets new standards for the emerging digital economy. It reduces the red tape associated with international commerce, making it easier for small- and medium-sized businesses to sell into Canada and Mexico. It also levels the playing field for U.S. manufacturers, raising standards and prohibiting anti-competitive activity by foreign companies.
But ensuring healthy import/export business with Canada and Mexico is also reliant on tariff-free trade. The effectiveness of the USMCA would be greatly undercut with the implementation of tariffs. Despite what is sometimes claimed, tariffs on foreign goods are not paid for by foreign countries. The tariffs simply make the price of those goods more expensive in the U.S. — meaning U.S consumers of those products (businesses and individuals alike) ultimately are paying the tariffs.
It’s the prospect of tariff-free, unencumbered trade among the three nations that makes a deal like USMCA attractive in the first place.
In previous public statements, New Hampshire’s congressional delegation has been receptive to the new trade agreement, while also saying they’d like to see changes. Tied into their concerns are the ongoing trade war and tariffs. A finalized USMCA should place America in an advantageous position, but not disadvantage our partners to the point it weakens the entire arrangement. After all, this trade deal is designed to give us a leg up on European and Asian competitors who seek to undercut our place in the North American market.
The Business and Industry Association of New Hampshire supports passage of the United States Mexico Canada Agreement. It gives a little to get a lot. The National Association of Manufacturers reports that Canada and Mexico purchase more U.S.-made goods than our next 10 trading partners combined. The jobs of 2 million American manufacturing workers depend on exports to these two countries.
Passage of the United States Mexico Canada Agreement will help New Hampshire businesses and manufacturers grow, compete globally and support thousands of well-paying jobs across the Granite State. I urge Congress to ratify the USMCA and the administration to work with Congress to make it happen.
New Hampshire needs freer, fairer trade to ensure a healthy climate for job creation and a continued strong economy.
Evan Smith is president and CEO of Hypertherm in Hanover.