What Trade Negotiations with Canada Mean for New England
By: Joe Alviani
The US and Canada continue what is described as “intense” discussions around the North American Free Trade Agreement (NAFTA). In light of a recent understanding between the US and Mexico, it is essential that these talks remain transparent and that no damage is done to our relationship with our longstanding ally to the north. For the economies of the six New England states a successful resolution of trade talks with Canada is of particular importance since Canada represents the premier goods export market for our region to the extent of $8.3 billion in 2017 exports.
Here are the facts as reported by the Office of the US Trade Representative:
- Canada is currently the country’s second largest goods trading partner with $581.6 billion in total two way goods trade during 2017. Goods exports totaled $282.3 billion; goods imports totaled $299.3 billion, a US goods trade deficit with Canada of $17.1 billion.
- However, and contrary to the rhetoric, trade in services with Canada (exports and imports) totaled an estimated $91.5 billion in 2017. Services exported were $58.4 billion; services imports were $33.0 billion for a services trade surplus with Canada of $25.4 billion in 2017.
- As importantly – according to the US Department of Commerce – US exports of Goods and Services to Canada supported an estimated 1.6 million jobs in 2015 – the latest year data is available
These facts make clear the substantial positive benefits that trade with Canada provides to the US. Whatever disputes may persist about trade issues and the fairness of trade policies between our countries must be resolved through open and honest negotiations without resort to false representations of the facts utilized only to feed a political base.
For New England the stakes are significant. Canada estimates that in 2017, service exports from our six states totaled almost $3.3 billion. And, by extrapolation exports of goods and services to Canada from our region resulted in hundreds of thousands of jobs. Tariffs imposed on Canadian goods by the US and any retaliatory tariffs from Canada can only have the effect of diminishing that positive economic impact. In fact, according to a recent US Chamber of Commerce report, $68 million in Connecticut exports to Canada are targeted for retaliation.
The positive economic impacts on the US and New England of open and vibrant trade with Canada cannot be overstated. If there are trade issues, they should be resolved honestly, using facts and informing the American people of the costs and benefits or using established trade mediation bodies to settle differences. For the New England economy especially, it is critical that these negotiations result in ensuring an on-going and active trading relationship with Canada.