Congressional Rebuttal in Defense of NAFTA

The author offers a new charge against reducing trade barriers through the North American Free Trade Agreement (NAFTA) in the article "Free Trade Brings High Tax," May 18. His point that it will result in enormous cost to the federal government is a new but weak arrow in the quiver of those who have always opposed NAFTA.

The Congressional Budget Office estimates that tariff revenues will be $800 million a year lower in 10 years with NAFTA than they would be with our current tariffs. Thus, the "enormous" cost of NAFTA in lost revenue will be but a tiny fraction of all federal revenue in 2003, if we do not raise taxes in the next 10 years!

Those who make this "enormous cost" argument miss the point that free trade is our primary engine for economic expansion, and that means more tax revenue. NAFTA promises a net increase of somewhere from 400,000 to 4.5 million new jobs over 10 years. Even if we take the lower estimate, the increased economic activity spurred by NAFTA will result in at least $5 billion annually from federal income and wage taxes.

Not only will the defeat of NAFTA hurt United States consumers and workers, it will also throw away billions in new federal tax revenues. Rep. David Dreier, Washington (R) of California

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