If America backs out of the Trans-Pacific Partnership, free trade allies in the region may turn to China, U.S. Chamber of Commerce CEO Tom Donohue told CNBC on Wednesday.
"If everybody else does it, those countries in the China-sphere are going to relocate their loyalties and their economic relationships [there] and not the United States," he said in a "Squawk Box" interview. "If we don't get more competitive, somebody else is going to sell [goods and services] to them."
While acknowledging the TPP needs a few tweaks, Donohue predicted it will be implemented, despite the antifree trade rhetoric from both Republicans and Democrats on the presidential campaign trail.
"We've beaten the dickens out of the NAFTA [North American Free Trade Agreement]," he said. "But the fact is it's created all kinds of jobs here the United States."
Free trade critics believe manufacturing job losses have been the result of trade agreements, but that's not the case, Donohue said.
"It comes from us trying to become more efficient so that we can compete with people all over the world," he said. "We have taken 40 percent of jobs out of the process [through] information technology, robotics, process engineering, supply-chain management."