[CTC] IMF study finds NAFTA 2.0 is a net loser for the U.S.

[Arthur Stamoulis]

IMF study online at: https://www.imf.org/en/Publications/WP/Issues/2019/03/26/NAFTA-to-USMCA-What-is-Gained-46680


POLITICO
USMCA ANALYSIS: NOT A WIN FOR THE U.S.: It might not be the economic impact Trump wanted: A new paper <http://go.politicoemail.com/?qs=e54d0b5ee031ebb399585849e35db1e5bd925a517f04d886c8012f43c07a3b2c4fd6be602a80d6fa821a8e6c162db59a> by IMF economists finds that Canada and Mexico come out slightly ahead under USMCA, while the U.S. is a bit of a loser. While the common analysis to date suggests the U.S. drove a hard bargain and beat its neighbors into making concessions, the paper released this week concludes the continent gains a negligible $538 million in economic benefits from the deal, and the U.S. is the only country to see a loss.

Small potatoes: The broader takeaway is that the net impact of USMCA is basically zero. It finds that the deal reduces trade on the continent by more than $4 billion, or 0.4 percent. It said the countries would benefit from new customs procedures but lose out under more onerous new automobile rules.

It all comes back to tariffs: The paper says that ending U.S. tariffs on steel and aluminum, and ending Canada's and Mexico's retaliatory duties, would produce a $2.5 billion benefit for the continent — about five times more than passing USMCA. The IMF cautions that research papers like this one reflect the authors' views and are not official IMF policy.

Don't tell Trump: The findings run counter to the main messaging coming out of the White House, which has been touting the benefits of the new NAFTA as part of its efforts to get Congress to pass the deal. Kudlow said Thursday that USMCA will attract about $80 billion in new auto sector investment and generate 70,000 to 80,000 new jobs, Doug Palmer reports <http://go.politicoemail.com/?qs=e54d0b5ee031ebb3453935353846de869fc61b6dc20bf5ae7aa5e63a332a663a1aafb26e5ba8c0bcbe98fece38e2915e>.


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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