New Report Says USMCA to Boost U.S. Economy 0.35%

(Bloomberg) -- The Trump administration’s deal to replace Nafta will boost the U.S. economy by 0.35 percent and lead to 176,000 new jobs in the sixth year after implementation, according to an analysis by an independent government panel that offered ammunition for both supporters and opponents of the new agreement.

The report, released Thursday by the International Trade Commission, is a procedural step required under the so-called Trade Promotion Authority law. Lawmakers will use the analysis as they consider whether to support the U.S.-Mexico-Canada Agreement, which the three countries signed last year and still needs congressional approval.

“The model estimates that the agreement would likely have a positive impact on all broad industry sectors within the U.S. economy,” the report stated. “Manufacturing would experience the largest percentage gains in output, exports, wages, and employment, while in absolute terms, services would experience the largest gains in output and employment.”

The ITC estimated that USMCA would increase U.S. exports to Canada by $19.1 billion and boost shipments to Mexico by $14.2 billion. American imports would increase by $19.1 billion from Canada and $12.4 billion from Mexico, according to the report.

The Trump administration on Thursday sought to get ahead the ITC report by publishing its own study of the benefits of changes to auto production rules in the new pact. In briefings with reporters Thursday, a senior official with the Office of the U.S. Trade Representative said the ITC is likely to underestimate the impact of changes in the USMCA including new strict production rules for automobiles that are designed to force automakers to invest more in the U.S.

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