Bills
| 3.23.22

Does NAFTA Need to be Renegotiated on Terms More Favorable to America? (H.R. 6056)

Do you support or oppose this bill?

What is H.R. 6056?

(Updated March 28, 2019)

This bill would withdraw Congress’ approval for the North American Free Trade Agreement (NAFTA) and set a timeline for renegotiating certain aspects of the agreement related to trade deficits, currency and manufacturing imbalances, and environmental concerns. If certain conditions are met in the renegotiation, the U.S. would continue to participate in NAFTA, otherwise it would withdraw.

Congress would officially retract its approval of NAFTA 365 days after this bill is enacted, and notice of America’s withdrawal would be provided by the president to Canada and Mexico within the first six months of that timeframe.

To stabilize the balance of trade between the parties to NAFTA, emergency tariffs (taxes on imports), quotas, and other measures could be imposed or adjusted to correct a trade deficit with Canada or Mexico that exceeds 10 percent of U.S. exports to that country or tops $500 million for three straight years. Similar adjustments would be permitted to account for the negative effects of rapid or substantial changes in exchange rates between the U.S. dollar and the currencies of Canada or Mexico. NAFTA would also be adjusted to allow for more relief of U.S. agricultural producers when they are unfairly disadvantaged by imports from Canada or Mexico.

The secretaries of several federal agencies would be required to make certifications to Congress about the effects of NAFTA, including Commerce, Labor, Agriculture, and the Attorney General before the U.S. could continue participating in NAFTA. The certifications would verify that:

  • The number of jobs gained from exports to NAFTA trade partners exceeds the number lost because of imports from NAFTA parties, and that the purchasing power of Americans has increased.

  • The export of U.S.-manufactured goods to Canada and Mexico exceeds the amount imported from those countries.

  • That pollution on the U.S.-Mexico border has decreased since NAFTA began, and that fewer products containing pesticides or additives that don’t meet U.S. standards haven’t been imported.

  • That imports from Canada and Mexico aren’t resulting in an increase in crime related to drugs and controlled substances.

  • That Mexico’s government is elected in free and fair elections, ensures civil rights, and has a transparent justice system.


Argument in Favor:



Argument Against:



Impact:

Businesses and consumers that buy products from the U.S., Canada, or Mexico; Congress; relevant federal agencies; and the president.


Cost:

A CBO cost estimate is unavailable.



Argument in favor

NAFTA has been a disaster for the U.S. as companies have shifted their operations out of the country and taken good middle-class jobs with them. Trade has to be fair for all parties involved, and the U.S. needs to use its leverage to renegotiate NAFTA to protect American industries, minimize trade deficits, and protect the environment.

Argument opposed

NAFTA has been mutually beneficial for Americans, Canadians, and Mexicans alike so it would be shortsighted to walk away from the agreement. Despite a growing trade deficit, U.S. consumers benefit from this free trade deal through less expensive goods and services, and those savings fuel growth in other areas of the U.S. economy.

Impact

Cost of H.R. 6056

Additional Info

Of Note: Sponsoring Rep. Marcy Kaptur (D-OH) has been fighting against NAFTA since its enactment in 1993, and authored a letter to the editor in the New York Times about why she has opposed the free trade agreement:

“As a United States representative from Ohio who fought against the enactment of the North American Free Trade Agreement, I can attest that its bite has been felt hard by the people across the region. Annual incomes average $7,000 below what they were in 1990. Good jobs with middle-class wages are precious. Part-time work with no benefits has replaced secure jobs… Our communities work to create new enterprise, but the downdraft of job outsourcing to penny-wage places coupled with a deluge of unchecked imports remains severe, quashing economic growth.”
The Editorial Board of Bloomberg authored a piece defending NAFTA, pointing out that even goods imported from Mexico are made with U.S. content and that broader trends like automation have affected jobs and wages. They argue that NAFTA has been a net positive for all countries involved and that not many jobs have been lost to Mexico and Canada, and that expanded trade has been beneficial for America:
“What’s missing from the NAFTA debate is that trade among the three countries has jumped 300 percent, to $1.2 trillion. Absent, too, is recognition that NAFTA has helped to make U.S. companies more efficient, competitive and profitable. Less expensive imports have improved Americans’ purchasing power, resulting in higher living standards. And per-person gross domestic product is up in all three NAFTA nations.”


Media:

Summary by Eric Revell
(Photo Credit: Keepscases / Creative Commons)