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Thursday, July 27 2017 @ 08:45 AM AST

Scotiabank: NAFTA boosted North American growth

While U.S. President Donald Trump threatens to impose a tax on imports from Mexico to build a border wall, another of Canada's largest banks has come out in defence of the North American Free Trade Agreement (NAFTA) among Canada, the USA and Mexico.

Scotiabank economists wrote in a February 10 note: "NAFTA has helped North America punch above its weight in economic terms. NAFTA has facilitated sustained economic growth amongst its three member countries in what has arguably become the world’s largest free trade area: the NAFTA zone accounts for nearly 28% of global nominal GDP in a region that has about 6.5% of global population (2015 data). This compares favorably with the European Union (EU) at nearly 24% of global nominal GDP and about a 6.9% share of global population. In PPP terms, the NAFTA zone accounts for 19.2% of GDP versus 16.9% in the EU."

Scotiabank also said: "In net terms, NAFTA has created jobs across all three member countries. Throughout NAFTA’s first decade, about 190,000 jobs were created in the US every year that were directly attributable to NAFTA; at the same time, somewhere around 60,000 jobs were lost, on average, for a net annual increase of about 130,000 US positions owing to NAFTA (Hufbauer and Schott 2007). On the job creation side, this was less than 10% of total jobs created in the US over the same period, and jobs lost amounted to less than 1% of total jobs lost through turnover."

For the full report, visit: http://www.gbm.scotiabank.com/scpt/gb...&V.pdf

For the RBC report a day earlier, visit: http://www.rbc.com/economics/economic...eb2017.pdf

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