The North American Free Trade Agreement negotiations have reached a critical point. It is time for the U.S. to make clear we are committed to staying in a new and improved deal that helps drive more economic growth in the U.S.
Negotiators from the U.S., Canada, and Mexico have been meeting since last week in Montreal for the sixth round of talks to discuss many unresolved issues. Adding to the urgency of this round is a looming self-imposed March deadline to finish the talks.
With NAFTA, the stakes for America’s economy and workers are incredibly high. Following the Trump administration’s decision to pull out of the Trans-Pacific Partnership last January, the NAFTA modernization talks became our first and best opportunity to create a modern free trade agreement that reflects the transformative changes that have occurred in our economy over the past quarter-century, particularly in the area of digital trade. Since NAFTA negotiations began last August, however, there have been many worrying signs from the administration about whether the U.S. is truly committed to remaining a part of the pact.
There is no doubt that the agreement needs an update. When it took effect 24 years ago, no one could have predicted the extent to which digital trade would become the cornerstone of the modern economy. Since then, the internet has opened markets once out of reach to the local American entrepreneur, torn down barriers to entry that prevented small businesses from growing beyond their communities, and facilitated the transfer of data, goods, and services at speeds once unimaginable. Between 2005 and 2014 alone, global cross-border data flows grew by 45 times, generating $2.8 trillion in economic value in 2014 — a greater impact on world GDP than global trade in goods.
Considering the impact of these new technologies, we welcomed the Trump Administration’s decision to come to the negotiating table in order to strengthen the agreement and bring it into the 21st century. At the same time, for all the improvements that can be made to NAFTA going forward, the value it has already generated for the U.S. economy is impossible to ignore, and an important reason why we should not exit the deal.
Since its ratification, our trade with Canada and Mexico has more than tripled. They are our largest markets outside our nation, accounting for over a third of our total exports. These markets have been a source of opportunity, providing jobs for 14 million Americans. If the administration pulls out of NAFTA, it will cost the U.S. jobs, stifle economic growth, jeopardize stock market gains, and increase prices on consumer goods.
The numbers make it clear: Stronger ties have allowed for shared prosperity to flourish with our neighbors to our north and south. Now is the time to focus on what needs to get done to improve NAFTA, not ditch it.
As the talks continue today, the U.S. must send a clear message to our NAFTA partners that the U.S. is committed to getting this deal done. We should come to the table with realistic proposals and a desire to build momentum by finally achieving consensus in areas where we have yet to bridge the divide.
One area ripe for agreement and progress out of this sixth round should be digital trade, where we should continue striving for the gold standard of rules that the U.S., Canada, and Mexico previously agreed to as part of the Trans-Pacific Partnership. This includes stronger protections for the free flow of data across borders, robust safeguards for intellectual property, customs modernization and fairness, intermediary liability protections, and ensuring U.S. innovators have a level playing field abroad to sell our best-in-the-world IT products, platforms, and services. Accomplishing this will help further increase access to over 160 million customers across our borders for American job creators and innovators, so many of whose goods and services are now digitally delivered.
When it comes to Canada and Mexico, nature made us neighbors, time has made us allies, and the shared desire for peace and prosperity has made us trading partners. Walking away from NAFTA would jeopardize our nation’s economic growth, weaken our relationship with two of our most important allies, and cede important economic opportunities and leadership in our own region to China and other competitors.
The stakes have never been higher. As talks continue, it is imperative that they demonstrate consensus can be reached and meaningful progress made. Job creators and workers in the U.S. need a win on NAFTA. Walking away would be a major loss.
Linda Moore is the president and CEO of TechNet, the national, bipartisan network of innovation economy CEOs and senior executives.
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