GAO Study Confirms NAM’s Argument: Trade Agreements Work!

By August 13, 2009Policy Experts, Trade

The just-released Government Accountability Office (GAO) in-depth study of the effect of U.S. Free Trade Agreements (FTAs) provides official confirmation of what the National Association of Manufacturers (NAM) has been saying: FTAs work for America. The GAO says that FTAs have largely accomplished the U.S. objectives of achieving better access to markets, strengthening trade rules, and have increased trade. Moreover, the FTAs have resulted in a larger share of foreign markets for many leading agricultural and manufactured goods.

The NAM has been pointing out to all who will listen that, contrary to what anti-trade agreement legislators assume, FTAs have not been responsible for the large U.S. trade deficit. U.S. Census Bureau trade data show that overall manufactured goods trade with NAFTA, CAFTA, and the other U.S. FTAs was never more than about 10 percent of the deficit, and that figure has been shrinking steadily. By 2007 it was 5 percent of the deficit – and last year our manufactured goods trade with FTA partners moved into surplus.

Yes, in 2008, U.S. manufactured goods trade with FTA partners – far from being the cause of our deficit – was in surplus by $21 billion. At the same time, though, our manufactured goods trade with countries that have not agreed to enter into trade agreements with us was in deficit by $477 billion. China accounted for $277 billion of the deficit, and the European Union accounted for nearly $100 billion.

Check the data for yourself. The NAM has started providing the data on our website at The data are updated every month to provide year-to date figures. Through June 2009, the surplus with our FTA partners was twice as large as it was in the first half of 2008!

The graph below says it all: It’s time to dispel the myth that FTAs cause our trade deficit and recognize what the GAO has confirmed – FTAs work for America.

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