Greater Louisville Inc. and the Kentucky Chamber of Commerce were two of 314 state and local chambers to sign onto a letter to President Donald Trump on Tuesday, urging him to keep and modernize the North American Free Trade Agreement (NAFTA) that he has vociferously criticized in recent years.
The letter to Trump from the organizations of business leaders comes as the fourth round of trilateral NAFTA negotiations begins on Wednesday.
In the letter, the chambers made their case for why business leaders believe the 24-year agreement with Canada and Mexico “has created American jobs, boosted economic growth, and strengthened local economies,” urging Trump to “support America’s workers, farmers, ranchers, and businesses of all sizes by protecting and preserving the deep economic ties and benefits the United States continues to enjoy under NAFTA.”
Stating that trade with Mexico and Canada surpasses $1.2 trillion annually and supports 14 million American jobs, the chambers said NAFTA has been “especially beneficial” for farmers, ranchers and rural Americans, as agricultural exports have quadrupled to $38 billion since the trade agreement went into effect.
The letter to Trump added that Canada and Mexico are the top two markets for American-made manufactured goods — with a total surpassing the next 10 largest markets combined — and that the U.S. recorded a trade surplus with those countries last year when services exports were combined with manufactured goods.
In a press release Wednesday, GLI chief operating officer Sarah Davasher-Wisdom said the letter demonstrated that the business community is united in support of a constructive renegotiation process and a modernized NAFTA.
“Kentucky’s largest trade partner is currently Canada,” stated Davasher-Wisdom. “We urge Congress and the Trump administration to
protect the partnerships that benefit our region’s signature businesses and workforce.”
The letter to Trump signed by GLI and the state chambers was also supported by Commerce Lexington and the Northern Kentucky Chamber of Commerce.
One of the main issues that Trump campaigned on was that free trade agreements like NAFTA and the chamber-supported Trans-Pacific Partnership (TPP) were bad for American workers and led to the export of jobs to other countries, alternating between a pledge to dramatically renegotiate their terms or scrap the deals altogether. Trump pulled out of the TPP shortly after taking office and his administration says its current policy is to renegotiate NAFTA, but as recently as August Trump stated that he would probably end up “terminating” that agreement.
Shortly after, Senate Majority Leader Mitch McConnell stated at an event full of agricultural leaders in Louisville that he was concerned about some of the trade rhetoric from the Trump administration, arguing that America actually has a trade surplus its trade agreement partner countries.
“The assumption that every free trade agreement is a loser for America is largely untrue,” said McConnell, adding that for the agricultural sector, “nothing is more important than trade.” He added: “We have for a very long time produced way, way more than we need ourselves. And knocking down these barriers and opening up these markets is absolutely critical.”
At a speech on Tuesday in Mexico City, U.S. Chamber of Commerce CEO Ted Donahue accused the Trump administration of inserting “several poison pill proposals” in the NAFTA renegotiation process “that could doom the entire deal,” particularly a rule for how many parts of a car have to be produced in the United States in order to avoid being hit with a border tax.
A Trump administration spokeswoman countered Donahue comments by saying that the president “has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change. These changes, of course, will be opposed by entrenched Washington lobbyists and trade associations.”