Increasing Economic Competitiveness
North America’s economies are tightly linked. U.S. trade with Canada and Mexico has more than tripled since the 1994 North American Free Trade Agreement liberalized trade between the three countries by progressively eliminating tariffs across many sectors. Canada and Mexico are our first and third largest trading partners, respectively. The U.S. Department of Commerce estimates U.S. exports to Canada and Mexico supported nearly three million U.S. jobs in 2015.
Our combined trade with Canada and Mexico totals over $1.2 trillion per year. Our three countries’ supply chains are substantially integrated, with a high percentage of North American content in each of our exports. According to the U.S. Department of Commerce, nearly 60 percent of the goods that the United States imports from Canada and Mexico are used to produce finished goods and services in the United States. Furthermore, the U.S. Chamber of Commerces estimates that 40 percent of the value of final U.S. imports from Mexico is sourced from the United States.
Canada or Mexico rank as the first or second largest export market for 42 U.S. states. Many U.S. small business exporters’ first foreign customers are in Canada or Mexico and U.S. trade with Canada and Mexico has supported over 140,000 small and medium-sized businesses in the United States.
Cross border investments are commonplace. In 2015, Canada was the third largest investor in the United States and Mexico was the 15th. Total Mexican investment in the U.S. economy is 10 times larger than it was in 1993. Overall, according to the U.S. Department of Commerce, Canadian and Mexican businesses have invested over $377.4 billion in the United States, and U.S. companies have invested $445.7 billion in Canada and Mexico, making our combined investment relationship with Canada and Mexico worth over $823.1 billion.
The United States, Canada, and Mexico are working together to strengthen our North American export platform, deepen market linkages, and help North America compete in world markets. The United States, Canada, and Mexico are collaborating on a North American Competitiveness Work Plan to promote prosperity across North America and to strengthen our region’s already economically-competitive position in the world. More closely aligning standards and regulations, enhancing the ability of our small and medium enterprises to compete in global markets, and facilitating cross-border travel and trade – including through better coordinated and prioritized infrastructure improvement efforts – promote greater efficiency and competitiveness for all three countries. By protecting intellectual property rights within North America, we help to ensure economic growth and innovation.
We are also working together to prepare today’s youth to become tomorrow’s business leaders by ensuring they have access to the technology and workforce development opportunities they need to excel. Quality education and training programs prepare students and workers to meet the changing demands of the labor market. Responding to these changes is critical to long-term North American and hemispheric prosperity.
At the 2016 North American Leaders’ Summit, the United States, Canada, and Mexico launched initiatives to reduce costs for businesses, improve supply chain and border efficiency, advance education and innovation, and engage the private sector and marginalized groups. Some of the highlights in this area include commitments to inaugurate a trilateral trusted traveler program, pursue greater regulatory alignment, fund collaboration among higher education institutions, support women’s entrepreneurship, and create a coordinated approach to address excess steel capacity.
In partnership with the Woodrow Wilson Center in Washington, D.C., the United States, Canada and Mexico held the first annual Stakeholder Dialogue on September 29, 2016, to bring together representatives from the private sector, non-governmental organizations, think tanks, and labor union representatives. This was the first in a series of meetings at which stakeholders can share views on the North American Leaders’ Summit process and trilateral goals.
For more information on improving North America’s economic competitiveness, see: