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Op-ed: NAFTA — a proven model for fostering prosperity

U.S. Trade Representative Robert Lighthizer, left, shakes hands with Canadian Foreign Affairs Minister Chrystia Freeland, accompanied by Mexico's Secretary of Economy Ildefonso Guajardo Villarreal, after they spoke at a news conference, Wednesday, Aug. 16
U.S. Trade Representative Robert Lighthizer, left, shakes hands with Canadian Foreign Affairs Minister Chrystia Freeland, accompanied by Mexico's Secretary of Economy Ildefonso Guajardo Villarreal, after they spoke at a news conference, Wednesday, Aug. 16, 2017, at the start of NAFTA renegotiations in Washington. (AP Photo/Jacquelyn Martin)
Jacquelyn Martin, AP

Consider, for a moment, a free trade zone that is the world’s biggest, most prosperous economic powerhouse. And negotiations to keep that powerhouse unified have hit significant roadblocks.

Next week, negotiators from the United States, Mexico and Canada will meet again to discuss the future of the North American Free Trade Agreement, a historic agreement that established a vast economic zone home to less than 7 percent of the world’s population but generating more than one-quarter of world’s Gross Domestic Product.

Since NAFTA came into effect in 1994, eliminating over time most tariffs on trade between the three countries, merchandise trade between them has tripled to some $1 trillion a year.

Over the past 23 years, NAFTA has created a deeply integrated North American market boasting a collective GDP of $21.1 trillion serving 480 million consumers. Put another way, last year the three NAFTA partners accounted for a staggering 16 percent of all global merchandise trade.

Canadian economists see the expansion of North American continental trade and investment as an engine of economic growth that has raised living standards for Canadians, Americans and Mexicans alike.

In fact, NAFTA underpins a trilateral trade relationship that is a model of trade liberalization for the world. It supports growth, innovation and well-paying jobs in all three countries. It has strengthened the rules and procedures governing trade and investment. It has a proven track record of middle-class job creation.

And this virtuous circle between free trade and economic growth is plainly evident right here in Utah. Canada is one of this state’s top international trading partners, a relationship worth $3.3 billion in 2016. Today, trade with Canada supports more than 79,000 Utah jobs — jobs that stretch from Salt Lake to small-town and rural communities, like Roosevelt, where any losses have an outsized impact.

On the surface, most people tend to think of trade as buying and selling goods outright. But that’s only one part of it. Companies such as Crescent Point Energy, a light oil producer with significant assets in both Utah and Canada, rely on NAFTA to move equipment, supplies and technical expertise back and forth across the border. Service providers on both sides of the border are able to fill specialty needs that might not be readily available locally, fueling growth with every exchange.

These supply chains are critical to maintaining healthy business operations for companies like Crescent Point, and we put them at a competitive disadvantage when we throw up new barriers. Costs will go up. Jobs will be lost.

Canada knows the value that Utah has to offer. Stantec, IBI Group, Novagold and numerous other great Canadian companies employ thousands of Utahns and contribute to the overall economic well-being of the Beehive State.

We should be looking for ways to grow mutual opportunities rather than close the door to access.

It cannot be denied that our two countries enjoy a truly unique and special relationship, forged by shared geography and maintained by deep, enduring economic, cultural and personal connections.

And while in trade talks we so often focus on business, it cannot be forgotten that behind every business, large or small, are our people, workers who make things together in this highly integrated continental economy.

Canadian Foreign Affairs Minister Chyristia Freeland said in August, just prior to the start of the tri-lateral negotiations: “Trade is about people. It’s about creating the best possible conditions for growth, for jobs, for prosperity for individuals and working families.”

For Canada, this is a practical aspiration based on more than two decades of experience under NAFTA, which has proven that trade liberalization can be a path to prosperity if it’s done right.

NAFTA is a complex agreement, and modernizing it is not a simple task. However, Canadians, Americans and Mexicans alike should eagerly embrace this opportunity to surge forward into a more prosperous, shared future. NAFTA is not a “winner-take-all” proposition, but rather a chance to secure success for everyone.

Join me in supporting NAFTA and the mutual gains it has secured for both Canada and the United States. Write, call or tweet our leaders in Salt Lake City and Washington that #NAFTAMatters to Utah, and that a strong North America working together benefits us all.

Stephane Lessard is the consul general of Canada for the U.S. Mountain West states, covering the five-state region of Utah, Colorado, Kansas, Wyoming and Montana.