Source: Sir compilation using USITC business data in dataweb.usitc.gov. For 2016, the “vehicles” are made up of items from the North American Industrial Classification System (NAICS) 3361 and “Parts” are made up of items under the number NAIC 3363. NAICS is the standard used by federal statistical authorities for the classification of businesses for the collection, analysis and publication of statistical data relating to the U.S. economy. On May 18, 2017, the U.S. Trade Representative (USTR) provided Congress with a 90-day notice of his intention to begin talks with Canada and Mexico to renegotiate NAFTA, as required by the Trade Promotion Authority (P.L. 114-26) 2015. Some of the trade issues that Congress could address with respect to NAFTA and the likely renegotiation of the agreement include the economic consequences of exiting the agreement, the impact on relations with Canada and Mexico, the requirements that Canada and Mexico could make to the negotiations, and an assessment of how to “modernize” or renegotiate NAFTA. Another issue is the implications of the U.S. exit from the Trans-Pacific Partnership (TPP), a proposed free trade agreement between the United States and 11 other countries, including Canada and Mexico.
Some TPP participants support the progress of a similar agreement without U.S. involvement, which could have implications for U.S. competitiveness in some markets1. The parties to this agreement create a free trade area in accordance with Article XXIV of the General Agreement on Tariffs and Trade. According to a 2013 Jeff Faux article published by the Economic Policy Institute, California, Texas, Michigan and other high-concentration manufacturing states were most affected by NAFTA job losses.  According to a 2011 article by EPI economist Robert Scott, the trade agreement has “lost or supplanted” some 682,900 U.S. jobs.  Recent studies have agreed with congressional Research Service reports that NAFTA has little influence on manufacturing employment and automation, accounting for 87% of manufacturing job losses.  The labour and environmental agreements contained language to promote environmental and labour cooperation, as well as provisions to address a party`s inability to enforce its own labour and environmental laws. Perhaps most notable was the settlement of disputes in ancillary agreements, which may ultimately impose monetary assessments and sanctions to address a party`s inability to enforce its laws.35 NAFTA marked the first time that the labour and environmental provisions were associated with a free trade agreement. For many, it was an opportunity to cooperate across borders on the environment and work and to establish a new type of relationship between nafta partners.36 NAFTA removed Mexico`s protectionist automobile decrees and played an important role in the integration of the auto industry in the three countries.
After the agreement, the automotive sector recorded some of the most significant changes in trade. The NAFTA provisions have included phasing out tariffs and phasing out many non-tariff barriers. It provided for uniform country-of-origin rules, better protection of intellectual property rights, the adoption of less restrictive procurement practices, and the abolition of performance requirements imposed on investors in other NAFTA countries. U.S. automakers, such as ford Motor Company, often rely on parts from the U.S., Canada and Mexico for final assembly of a vehicle. North American auto parts manufacturers may use inputs and components from another NAFTA partner for parts assembly, 59 According to some estimates, cars manufactured in North America sold in the United States have domestic content between 47% and 85%60 source: From CRS using commercial data