Modernization of the North America Free Trade Agreement
May 9, 2018
The Honorable Donald J. Trump
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500
Subject: Modernization of the North America Free Trade Agreement
Dear Mr. President:
We the undersigned members of the American Legislative Exchange Council (ALEC) are writing to urge you to preserve the economic and commercial benefits of the North American Free Trade Agreement (NAFTA) in the renegotiated FTA. Comprised of almost one-quarter of the nation’s state lawmakers, ALEC is America’s largest nonpartisan, voluntary membership organization of state legislators dedicated to the principles of limited government, federalism and free markets. ALEC members recognize the power of international trade to drive economic growth and since our inception in 1973, members have advanced policies that promote international commerce. Canada and Mexico are among the top three trading partners for all but one of the 50 states, and NAFTA has greatly increased and facilitated trade with these two economic partners prompting the adoption of model policy that supports modernization and preservation of this important trade framework. ALEC model policy can be accessed here and here.
We commend you and your Administration for prioritizing NAFTA renegotiation. NAFTA has generated greater economic activity by American businesses and has been linked to a reduction in consumer prices, growing the economy, driving competitiveness and improving efficiency and innovation. America’s GDP is up $80 billion as a result of NAFTA. According to the U.S. Chamber of Commerce, an estimated 14 million American jobs rely on trade with our northern and southern neighbors, nearly 5 million of which are attributed to increased trade due to NAFTA.
However, the Agreement is more than 24 years old and very much in need of a facelift to reflect advances in technology and changes in international commerce, if NAFTA’s future is to hold as much economic promise as its past. A stronger NAFTA will provide the certainty which countless U.S. business sectors including energy, agriculture and manufacturing, need to thrive. But after several rounds of negotiations, the future of NAFTA is still uncertain. It would be catastrophic for our states’ economies if the U.S. were to abandon the FTA, especially when the alternative, a modernized agreement, will expand opportunities for American companies and workers in our states.
As we look to strengthen this trade framework, we must ensure that important provisions that foster American priorities are included. Therefore, a vital element for a modernized NAFTA is the assurance that American business interests are protected outside U.S. borders. That is why keeping the Investor State Dispute Settlement (ISDS) mechanism is crucial. ISDS provisions included in NAFTA – and many other trade deals – protect the investments of U.S. companies in the event of disputes between American companies and our trading partners. Opening up foreign markets and fairly settling investment disputes as they arise are critical for ensuring economic prosperity here at home. NAFTA without ISDS could result in biased foreign courts treating American businesses unjustly and making U.S. investments vulnerable to potential seizure or other unlawful mistreatment. Bottom line: Abandoning ISDS is not in America’s best interest and is a bad deal for the nation.
We appreciate your consideration of our perspective on this critical trade deal as negotiations continue. We also invite you to contact us if you would like us to share the perspective of the states as you modernize NAFTA in order to enhance trade relations with our North American allies.
Rep. Stuart Adams (UT-22) Majority Whip
Rep. John Carson (GA-46)
Rep. Alan Clemmons (SC-107)
Rep. George Cleveland (NC-14)
Sen. Ed Emery (MO-31)
Rep. Yvette Herrell (NM-51)
Rep. Susan Martin (NC-8)
Sen. Wayne Niederhauser (UT-9)
Rep. Jason Saine (NC-97)
Sen. Jim Stalzer (SD-11)
Rep. Jim Tedder (MI-43)
Rep. Gene Whisnant (OR-53)
CC: Ambassador Robert Lighthizer, U.S. Trade Representative
Larry Kudlow, Director, White House National Economic Council
Kevin Hassett, Chairman, White House Council of Economic Advisers
Peter Navarro, Director, White House National Trade Council
Wilbur Ross, Secretary of Commerce
Steven Mnuchin, Secretary of the Treasury
Rick Perry, Secretary of Energy
Sonny Perdue, Secretary of Agriculture
Michael Pompeo, Secretary of State