[Congressional Record Volume 163, Number 204 (Thursday, December 14, 2017)]
[Senate]
[Pages S8028-S8029]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                                 NAFTA

  Mr. FLAKE. Madam President, I rise today because I believe that some 
here in Washington are under the illusion about what would happen if we 
were to withdraw from the North American Free Trade Agreement, or 
NAFTA.
  Some people still, inexplicably, believe that this would be a good 
thing. They believe the relationship between the United States and 
Mexico and Canada is somehow a raw deal for Americans. Let's talk about 
Mexico for a while.
  In reality, Mexico spends 26 percent of its GDP in its purchasing of 
goods from the United States, while we spend less than 1 percent of our 
GDP--I think it is 0.2 percent--in our purchasing of goods from them. 
Again, for those who obsess over trade deficits with Mexico, Mexico 
spends 26 percent of its GDP in its purchasing of goods from the United 
States while we spend less than 1 percent of our GDP in our purchasing 
of goods from them. Prior to NAFTA, our total trade with Mexico was 
under $80 billion. Now that trade approaches $600 billion. That is a 
good thing. That is good for us, and it is good for Mexico. Trade is 
not a zero-sum game.
  These folks also seem to think that terminating NAFTA will have no 
lasting impact on this Nation or its economy. In reality, pulling out 
of NAFTA would have sweeping negative consequences for Americans all 
over the country. Let me briefly describe what America would look like 
without NAFTA.
  It would be an America with fewer jobs and higher unemployment. Some 
of these jobs that would be lost would not return for decades, maybe 
even for a generation. Other jobs would never return. It would be a 
poorer America without NAFTA. The gross domestic product would drop. 
Much of the positive growth that we have seen recently may be erased. 
In the last year, we have seen impressive GDP numbers. We have achieved 
great growth through strong, conservative policies--in our having a 
better regulatory environment, in particular. I hope the days of 1-
percent growth are behind us, but if we scrap NAFTA, that may not be 
the case. An America without NAFTA would be one crippled by subsidies.

[[Page S8029]]

  I agree with my colleague from Kansas and the Senate Agriculture, 
Nutrition, and Forestry Committee chairman, Senator Roberts. He 
recently explained that the withdrawal from NAFTA would add to farmers' 
demands for increased farm subsidies at a time when Congress simply 
cannot afford that. These farmers would prefer to sell their crops at 
reasonable prices, but in our exiting NAFTA, they will certainly ask 
for economic protection through increased farm subsidies. I believe 
that many of these subsidies are automatically added and that these 
subsidies would substantially grow the national debt and dramatically 
curtail any ability to rein in government spending.
  Without NAFTA, we will likely find ourselves in a less secure 
America. The withdrawal from NAFTA will destabilize the Mexican economy 
and create a crisis on our southern border. Terminating this agreement 
will seriously undercut the important progress that has been made over 
the past several decades--that of improving drug enforcement and 
stabilizing the Mexican economy. Efforts toward privatization, criminal 
justice reform, and modernization have been good for the Mexican 
economy. In turn, it has been good for our economy as well.
  According to the Department of Homeland Security, the number of 
people trying to cross illegally into the United States from Mexico has 
fallen to the lowest level in 46 years. That is largely due to there 
being a better economy in Mexico. If we pull out of NAFTA and allow 
Mexico to plunge into economic chaos and uncertainty, it will, 
certainly, drive up the number of those who want to come to the United 
States.
  These are the real ramifications of terminating NAFTA--an America 
with higher unemployment, a lower GDP, more Federal subsidies, 
particularly for agriculture, and increased illegal immigration.
  All of this--exiting NAFTA--would come before we would face the 
ultimate challenge of negotiating a new trade agreement to replace 
NAFTA. Anyone who suggests that this process is quick or easy is sadly 
mistaken. In today's global economy, people and nations have more 
choices than ever.
  For evidence of this, look no further than to the disastrous decision 
to withdraw from the Trans-Pacific Partnership. Canada and Mexico, like 
other TPP nations, could decide to move ahead without the United 
States. These countries have more choices than ever. It used to be that 
we were the only game in town. That is not the case anymore. These 
countries have and will move on without us. They could simply refocus 
their efforts on alternative markets and explore new trade partners. It 
is a dangerous game when we in America are no longer seen as a reliable 
trade partner. We will have countries that will be reluctant to enter 
into agreements with us and that will simply not want to renegotiate.
  Let's not be swayed by those who would have us believe that the 
impact of exiting this trade agreement would somehow be minor or short-
lived. There are some who say that we have to exit the agreement in 
order to negotiate a better agreement. As I have explained, just 
exiting the agreement will have real ramifications--canceled contracts, 
particularly for those in agriculture when you are dealing with 
commodities. Let's not be misled by those who are under the illusion 
that negotiating an entirely new trade agreement, as I have said, will 
be simple or painless. It will not be.
  In closing, we have seen the limits to the philosophy of ethno-
nationalism and economic nationalism. We have seen those limits 
politically, gratefully, this week in Alabama. Let's not follow those 
who believe in that philosophy or who are advocating an ethnocentric, 
or an extreme, nationalistic trade policy. That would be disastrous for 
the economy of the United States in its moving forward.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mrs. CAPITO. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.