America’s Free Trade Agreements: 20 Countries, 30 Years, 1 Result – Success

By Chris Hoyler, Director, Communications and Strategy, The U.S. Chamber of Commerce.

"Earlier today, the U.S. International Trade Commission released a report analyzing the historical performance of America’s free-trade agreements (FTAs). Since 1985, America has built a network of FTAs with 20 countries around the globe, and the U.S. Chamber of Commerce has been a vocal champion in explaining why these agreements have been beneficial to U.S. businesses and workers.

John Murphy, the Chamber’s Senior Vice President for International Policy, testified before the USITC on those benefits, pointing largely to a number of Chamber-published reports, including The Open Door of Trade: The Impressive Benefits of America’s Free Trade Agreements (March 2015), NAFTA Triumphant: Assessing Two Decades of Gains in Trade, Growth and Jobs (updated October 2015), and Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners (March 2010).

Murphy explained that across these reports and other close examinations of FTAs, there was one common thread: America has an impressive record of success in this department. They’ve generated new opportunities for commerce, boosted economic growth, raised productivity and improved conditions for the creation of good jobs.

While the partners in America’s 20 FTAs represent just 6% of the world’s population outside the United States, in recent years they have purchased nearly half of all U.S. exports. That’s no surprise, considering that more recent FTAs have focused on immediately lifting economic barriers, allowing American businesses to quickly gain market access for their exports.

This level of market access is especially important to small business exporters. Murphy pointed out to USITC that of the nearly 300,000 American companies that export, more than 98 percent of them are small and medium-sized enterprises. FTAs have eliminated nontariff barriers that small businesses can’t handle because of the high fixed costs they impose on their bottom line; as more of these agreements are implemented, small businesses will find greater opportunities to serve markets that, previously, only large multinational corporations could access.

When American businesses can access more markets, they can generate more output for their exports, and that means more American jobs are created. Murphy cited to USITC a 2010 Chamber study entitled Opening Markets, Creating Jobs: Estimated U.S. Employment Effects of Trade with FTA Partners, which noted that increased trade brought about by America’s 20 FTAs boosted U.S. output by more than $300 billion — enough to support 5.4 million U.S. jobs.

As we move in to an uncertain period for trade agreements, Murphy told USITC that the U.S. Chamber believes that trade policy must take into account the needs of Americans as both consumers and producers. FTAs should create a level playing field for American workers, farmers, and companies, and America’s next big opportunity to establish that fact is through passage of the Trans-Pacific Partnership. With a three-decade record of success from single-country FTAs, there is no doubt that the TPP, which would eliminate more than 18,000 tariffs and other barriers for U.S. businesses, will vastly extend the benefits of FTAs for future generations of Americans."