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Editorial: Killing NAFTA will hurt WNY economy

President Trump has been talking tough, threatening to withdraw from the decades-old North American Free Trade Agreement. But killing that arrangement would likely do more harm than good to this region.

The same could be said for other parts of the country that rely on trade with Canada and Mexico. Buffalo’s economic interest rests in having a frictionless border for goods, which helps create and grow small businesses such as the one John Kincaide operates.

Featured in an article by News Washington bureau chief Jerry Zremski, Kincaide started in 2010. Because of NAFTA, his Alden-based company is able to ship worn-out batteries to a Canadian firm. That company reprocesses the material without paying duties when the batteries cross the border.
The U.S. International Trade Administration reports that exports from Buffalo-area companies to Canada and Mexico rose 21.3 percent over six years, totaling nearly $2 billion in 2015.

Consider the way automobiles are made these days. Parts can come from any of the three countries, then be assembled and sold in all three. Experts contend that pulling out of NAFTA would likely increase the cost of the average new vehicle by about $1,000.

The agreement is not perfect, of course. The Trump administration should consider relatively minor changes proposed by the Buffalo Niagara Partnership: provisions encouraging the U.S. and Canadian governments to make border crossings more efficient, modernizing visa programs and harmonizing the two countries’ business regulations to make it easier for more companies to engage in cross-border business.

Labor leaders want guaranteed labor rights in all three countries, strengthened currency rules to prevent companies from shifting jobs to capture currency fluctuations, “rules of origin” to ensure more components are manufactured in America, and that the new NAFTA is negotiated in the open with input from Congress and the public. Those demands would come at the expense of Canada and Mexico, and likely collapse free trade altogether.

There will always be winners and losers in various industries in any trade negotiation. A well-crafted deal will have overall benefits for all participants, as NAFTA has had. Let’s hope Trump’s threat to withdraw from the agreement is just a ploy to gain leverage in a bid to tweak the deal to make it better for all parties.

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