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A revised North American Free Trade Agreement would lead to a modest boost in economic growth and U.S. auto jobs, according to a report released Thursday.
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The United States Mexico Canada Agreement, struck by the three North American countries last year, would increase real U.S. gross domestic product by an estimated $68.2 billion, or 0.35%, according to the U.S. International Trade Commission. It would raise employment by about 176,000 jobs, or 0.12%, the report says.
The agreement — which the countries’ legislatures’ still need to ratify — would boost U.S. exports to Canada and Mexico by 5.9% and 6.7%, respectively.
“The model estimates that the agreement would likely have a positive impact on all broad industry sectors within the U.S. economy. Manufacturing would experience the largest percentage gains in output, exports, wages, and employment, while in absolute terms, services would experience the largest gains in output and employment,” the ITC said in a news release.
The report comes as President Donald Trump pushes Congress to ratify the revised trade deal despite reservations from both Democrats and Republicans. The president has spent his time in office trying to rework trade relationships with major partners, saying changes such as the ones made to NAFTA will encourage American manufacturing and job creation in the U.S.
While the ITC study shows the deal would have positive benefits for jobs and economic growth, it underscores that the deal is hardly the “largest” trade agreement ever as Trump has boasted. Even some Republicans in Congress have called the USMCA more of a tweak to NAFTA than a major overhaul.
“The miniscule projected gains in this long-awaited official government assessment of the revised NAFTA contradict Donald Trump’s grandiose claims that it will lead to ‘cash and jobs pouring into the U.S.’ and reinforces congressional Democrats’ views that absent more improvements, the revised deal won’t stop NAFTA’s ongoing damage,” Lori Wallach, director of Public Citizen’s Global Trade Watch, said in a statement to CNBC.
A separate report from the U.S. Trade Representative, part of the executive branch, projected the deal would have bigger effects on the auto industry specifically. While the ITC estimated 28,000 job gains in the auto sector, the USTR thinks the trade deal would create 76,000 auto jobs in the next five years, a roughly 7.5 percent increase for the industry.
Some industries cheered the ITC report — both the National Association of Manufacturers and the Computer & Communications Industry Association encouraged Congress to approve USMCA following its release.
Democrats — who hold the House and the power to slow ratification of the deal — have raised concerns about labor and environmental provisions contained in the deal. Some GOP lawmakers have also pushed Trump to drop tariffs on steel and aluminum imports from Canada and Mexico before moving forward with the agreement.
The deal would not come without its downsides for consumers. Under the provisions of the agreement, auto costs would rise and sales would fall, the ITC estimated.
— CNBC’s Mary Catherine Wellons contributed to this report