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Business Groups in US, Canada, Mexico Fear Breakup of Manufacturing Supply Chain without NAFTA

25 Jan,2018

Noting that NAFTA has helped quadruple trade between the three countries since taking effect in 1994, now reaching $1.5 trillion annually, the chambers of commerce from all three countries argue that multinational manufacturing value chains could be expensive to break up.


U.S., Canadian, and Mexican chambers of commerce urged NAFTA leaders on Jan. 22. to find common ground to renegotiate the massive free trade deal.


Just ahead of the sixth round of negotiations to update the North American Free Trade Agreement, metropolitan chambers of commerce stressed that free trade keeps them prosperous and creating jobs.


We "urge our respective governments to come to an agreement to an updated NAFTA, and to maintain it for the future economic success of all three nations," the leaders of 25 metropolitan chambers of commerce said in a statement.


The chambers, which represent economic zones with a combined GDP of nearly $3.5 trillion, said they "share a common desire to maintain free trade between the United States, Mexico and Canada."


Noting that NAFTA has helped quadruple trade between the three countries since taking effect in 1994, now reaching $1.5 trillion annually, they also argued that multinational manufacturing value chains could be expensive to break up.


President Donald Trump wants to replace NAFTA with an agreement he says would be more beneficial to the United States.


The six days of talks in Montreal come amid high trade tensions between Ottawa and Washington and as Trump insists Mexico will pay for the construction of a controversial wall along America's southern border.


Despite significant progress on so-called "bread and butter" issues, Foreign Minister Chrystia Freeland says Canada is bracing for "the worst," including a possible US withdrawal from NAFTA that would effectively mean the end of the tripartite trade pact.


While often railing against NAFTA, Trump has at times also seemed to soften his view, telling The Wall Street Journal he would be "a little bit flexible" on his threat to withdraw because of the upcoming Mexican presidential election on July 1.