Thank you very much for that warm welcome, Chairman Eyking, and vice-chairs Allison and Ramsey.
It's an honour to appear here today in Canada's Parliament, representing the U.S. Chamber of Commerce.
The U.S. Chamber of Commerce is the largest business organization in the United States. We represent the interests of more than three million companies of every size, sector, and state—big companies, little companies, manufacturers, service providers, agricultural firms. We also represent more than 2,000 state and local chambers of commerce, nearly 1,000 sectoral associations, and a network of American chambers of commerce abroad, including one here in Canada. I should also add that we include in our membership U.S. affiliates of a number of Canadian companies.
On the topic of the day, the North American Free Trade Agreement, as we've affirmed since the beginning of the year, we support the initiative to modernize this agreement, taking into account the technological, economic, and other changes in the North American economy and the global economy in recent years. But in our view, since the agreement went into force in 1994, the NAFTA has been a major success for the three member countries, for the United States, for Canada, and for Mexico. We have seen a substantial increase in continental trade and cross-border investment. It has stimulated economic growth. It has raised living standards and improved the global competitiveness of all three of our economies. You know the statistics very well. It's more than $3 billion of trade every day. In the United States, as my boss Tom Donohue, the president and CEO of the U.S. Chamber, often says, trade with Canada and Mexico supports 14 million American jobs. I believe that breaks down as nine million in trade with Canada and five million in trade with Mexico. So we see every day the benefits of this agreement. Much of this commerce depends on the NAFTA, though, in ways that are not even widely appreciated, and the negotiations that are now under way, we believe, should be conducted in a manner that does not put these current trade relationships at risk. We believe this goal is eminently achievable.
Over recent months we have offered the following general principles for NAFTA modernization.
First, do no harm. Interrupting the $1.3 trillion in annual trade across our borders or reverting to the high tariffs that were in place prior to the agreement could endanger many of the millions of jobs that depend on trade in our three countries.
Second, we need to work to keep the agreement trilateral. Maintaining the NAFTA's three-party framework is critical as transitioning to entirely new bilateral agreements presents real risks of trade disruption. Such a transition might also introduce divergent rules, one set for U.S.-Canada trade, one set for U.S.-Mexico trade, a third for Canada-Mexico trade, and that would mean higher costs for industries in a number of sectors.
Third, we need to ensure a seamless transition. Chairman Kevin Brady, of the House ways and means committee, whom I believe you've met with in the past, has emphasized this point repeatedly: the importance as we move from the agreement we have now to one in the future that there should not be a sharp break of any kind that could interrupt trade.
Finally, throughout this modernization process I should comment that we have heard a number of threats to withdraw from the agreement. We take these threats very seriously. In the view of the U.S. Chamber of Commerce, this move, quitting the NAFTA, would be an economic, political, and national security disaster for the United States. On this issue, my boss Tom Donohue issued a column today in The Wall Street Journal which some of you may have seen, and I'll quote briefly from it.
Undermining Nafta would be a grave and costly mistake that would hurt the very farmers, manufacturers, workers and families this White House purports to protect. Americans should do everything necessary to avert this grievous self-inflicted wound.
How might withdrawal happen? At this stage, we think the risk of it simply happening suddenly through a self-initiated act is somewhat lessened. What we're seeing at this moment, though, is concern among a number of our member companies about the direction of the negotiations in a number of areas, including proposals from the U.S. administration relating to investment protections, strict domestic content rules, or a sunset provision. That causes significant concern. The alarm is that those kinds of heterodox proposals, not seen in past trade agreements, could lead to a breakdown in the negotiations and a withdrawal.
We are pressing the U.S. negotiators, asking them to bear in mind every day the 14 million American jobs that depend on Canada and Mexico, as well as the millions more in Canada and Mexico.
We believe we can move forward and positively modernize this agreement and make it work for the 21st century economy, and we look forward to working with you to make that happen.
Thank you. I look forward to our discussion.