NAFTA Has Been Great For Our Economy — But Here’s Something We Can Improve


Since the passage of the North American Free Trade Agreement (NAFTA) — a treaty envisioned by Ronald Reagan and later implemented by Bill Clinton — trade between the U.S., Canada, and Mexico has increased from $290 billion in 1993 to $1.1 trillion today.

This skyrocketing increase in economic activity has blessed American workers with a de facto pay raise by virtue of lower prices resulting from increased productivity. Free trade is always a net-positive for our economy because it eliminates arbitrary barriers between nations, allowing for greater competition and specialization. This allows our paychecks to go further, while opening up additional markets for the goods and services we produce best.

But as the Trump administration works to renegotiate this agreement, there is one area where we can improve — protecting intellectual property. A new report from the Committee to Unleash Prosperity (whom this columnist is professionally affiliated with) sheds some light on the current challenges we face in protecting America’s intellectual property. Here is a quick summary of the findings:

While NAFTA has clearly been a net plus to the economies of Mexico, Canada and the U.S., inadequate protections of IP cost American companies – producers of drugs, vaccines, computer software, movies and music, manufacturing designs, and so on – tens of billions of dollars a year. This reduces the value of these companies, thus hurting American workers, consumers, and shareholders.

The International Chamber of Commerce and International Trademark Association estimates the total value of the global trade in pirated and counterfeit goods as high as $1.7 trillion in 2016. Pirating, counterfeiting and ignoring patent protections is a growing problem in trade and for leading American innovators in advanced manufacturing, pharmaceuticals, software, music, and video.

Some of NAFTA’s IP provisions are out-of-date and ripe for reform, while others are technically adequate but under-enforced, or simply ignored. In all cases, American companies are losing out in profits and competitiveness because of a general failure to recognize the value of IP and safeguarding these assets, which are increasingly the high value-added products of the U.S. and global economies.

NAFTA renegotiation offers an invaluable opportunity to set precedent and correct for these inadequate safeguards of IP. This is especially important because getting it right under NAFTA should become a model for all future trade deals and treaties for years to come.

Since the International Chamber of Commerce and International Trademark Association estimates that the value of all counterfeit goods globally could rise to $2 trillion by 2022, the ongoing NAFTA negotiations afford us a timely opportunity to review how America is protecting its intellectual property and to examine ways to enforce or strengthen these safeguards.

While I disagree with President Trump’s decision to pull out of the Trans-Pacific Partnership and his calls for tariffs, protecting America’s intellectual property is one trade issue we can agree on.

Jonathan Decker

Jonathan Decker is the Chief Economic Correspondent for

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