A report on Trump's NAFTA overhaul found that it's not going to do much for the economy

Associated Press

FILE - In this Nov. 30, 2018 file photo, President Donald Trump, center, sits between Canada's Prime Minister Justin Trudeau, right, and Mexico's President Enrique Pena Nieto as they sign a new United States-Mexico-Canada Agreement that is replacing the NAFTA trade deal, during a ceremony at a hotel before the start of the G20 summit in Buenos Aires, Argentina. Trump's new North America trade agreement would give the U.S. economy only a modest boost, an independent federal agency finds. (AP Photo/Martin Mejia, File)

• A report out Thursday said President Donald Trump's new North American trade deal would increase gross domestic product by 0.35% by the time it is fully implemented in six years.
• USMCA has been a key initiative for the Trump administration in its bid to bring jobs back to the US.
• Adam Ozimek, an economist at Moody's Analytics, questioned how different it is from the trade dynamics that have governed the US, Mexico and Canada for decades.

A North American Free Trade Agreement overhaul that was rolled out last year would have a positive but modest impact on the US economy, the International Trade Commission said Thursday.

In a congressionally-mandated report, independent experts said President Donald Trump's United States-Mexico-Canada Agreement would increase gross domestic product by 0.35%, or $68.5 billion, and jobs by 0.12%, or 176,000, by the time the deal is fully implemented in six years.

The increase in economic output would be largely driven by reduced trade policy uncertainty, according to the USITC report. If the trade policy uncertainty remains, gross domestic product would actually fall by 0.12%.

The deal has been a key initiative for the Trump administration in its bid to bring jobs back to the US. But some experts have argued USMCA isn't a significant departure from the trade dynamics that have governed North American countries for decades.

"The results are consistent with what economists have been saying about the trade deal, which is that the changes are not of serious consequence for the US economy," said Adam Ozimek, an economist at Moody's Analytics.

USMCA also modifies production standards for automakers across the three countries. The report found that under the new agreement, the auto industry would create 30,000 jobs but overall American car production and consumption would fall in part because of higher prices.

In March, an International Monetary Fund study found USMCA would have a muted effect on the overall economy and could curtail trade. It found the new rules would lead to a decline in the production of vehicles and parts in all three North-American countries, shifting them toward greater sourcing from outside of the region.

"The results show that together these provisions would adversely affect trade in the automotive, textiles and apparel sectors, while generating modest aggregate gains in terms of welfare, mostly driven by improved goods market access, with a negligible effect on real GDP," the report said.

The report clears a procedural hurdle for USMCA, which is still subject to an up-or-down vote in Congress. Over the past year, Democrats have been pushing for stricter labor standards and enforcement mechanisms.

"This report confirms what has been clear since this deal was announced - Donald Trump's NAFTA represents at best a minor update to NAFTA, which will offer only limited benefits to U.S. workers," said Sen. Ron Wyden, D-Ore., the ranking member of the Senate finance committee.