NAFTA at 20: One Million U.S. Jobs Lost, Higher Income Inequality

[brentspeak]

After all was said and done, the only jobs NAFTA actually created were a few online propaganda shill positions:

"Get paid to post pro-NAFTA talking points on the internet! Pay starts at $9.50/hour! Hide behind the anonymous mask of a progressive-type avatar or username while pimping corporate labor-destroying policies that benefit the 1% at the expense of everyone else; no one will know who you really are! We'll provide the talking points; you type in the bull$hit!"

http://www.huffingtonpost.com/lori-wallach/nafta-at-20-one-million-u_b_4550207.html

NAFTA at 20: One Million U.S. Jobs Lost, Higher Income Inequality

Lori Wallach
Director, Public Citizen's Global Trade Watch

For NAFTA's unhappy 20th anniversary (last year, 2014), Public Citizen has published a report that details the wreckage. Not only did promises made by NAFTA's proponents not materialize, but many results are exactly the opposite.

Such outcomes include a staggering $181 billion U.S. trade deficit with NAFTA partners Mexico and Canada and the related loss of 1 million net U.S. jobs under NAFTA, growing income inequality, displacement of more than one million Mexican campesino farmers and a doubling of desperate immigration from Mexico, and more than $360 million paid to corporations after "investor-state" tribunal attacks on, and rollbacks of, domestic public interest policies.

The study makes for a blood-boiling read. For instance, we track the specific promises made by U.S. corporations like GE, Chrysler and Caterpillar to create specific numbers of American jobs if NAFTA was approved, and reveal government data showing that instead, they fired U.S. workers and moved operations to Mexico.

The data also show how post-NAFTA trade and investment trends have contributed to middle-class pay cuts, which in turn contributed to growing income inequality; how since NAFTA, U.S. trade deficit growth with Mexico and Canada has been 45 percent higher than with countries not party to a U.S. Free Trade Agreement, and how U.S. manufacturing exports to Canada and Mexico have grown at less than half the pre-NAFTA rate.

[liberal_at_heart]

1. K&R

[progressoid]

2. Rec!

[ucrdem]

3. I pledge allegiance to the meme that Bill Clinton destroyed America

and Barack wants to do the same . . .



Notice that the employment rate rose after passge of NAFTA and continued to rise while Bill Clinton was in office.

[jeff47]

14. Pssst....NAFTA didn't end in 2000.

Kinda demonstrates your graph is intended to defraud when you have an end date on NAFTA.

[ucrdem]

16. At the start of 2001 Clintonomics ended and Terranomics began.

You can see the effects on employment in the chart.

[jeff47]

20. No, at the start of 2001 the dot-com bubble burst.

You ascribe far too much economic power to the President.

"Morning in America" happened because the Fed cut interest rates. Not because of "Reagan's tax cuts".
The boom during Clinton's presidency was due to the dot-com bubble.
The recovery from the dot-com crash during W's presidency was due to the real estate bubble. Largely created by banking regulations being gutted in the 1990s.

The most those Presidents did was not get in the way. But even then they have a very limited ability to get in the way. Congress has way more power than the President in affecting the economy. A President can call for tax cuts or tax hikes. Or for more or less regulation. He can't actually make them happen to any significant degree.

Your post is an attempt to rewrite history to fit the narrative you want to tell. Just like those attempting to excuse the invasion of Iraq.

[Jack Rabbit]

27. What is Terranomics?

I've never heard of that before.

[Exilednight]

44. Basically, it's consumer economics. Belief that a country can grow economically through

Consumption. It's a bit more detailed, but that's the 10 second overview.

[jwirr]

26. Yep. What percentage of those jobs are living wage jobs like the ones that went overseas?

[pampango]

4. Tariffs on imports from Mexico averaged 4% before NAFTA. Inequality had been rising since 1969.

It is unlikely that retaining a 4% tariffs on imports from Mexico would have changed much.

Of course, manufacturing (and overall) jobs and manufacturing (and overall) wages increased after NAFTA until Bush came into office.

For individuals the change in income inequality has been essentially flat since 1960 - at much too high a level. For families and households income inequality has worsened at a steady rate since 1968.

[ucrdem]

6. +10

NAFTA-killed-America is about ready to follow Peak Oil to the junkheap of failed RW memes. Hope so anyway!

[Art_from_Ark]

9. Screw that bullshit

I know that NAFTA was responsible for a lot of jobs leaving my hometown area. That's just one Congressional district out of 435. How many more jobs were lost in other districts? And those jobs aren't coming back. You can add all sorts of spices to that dog turd and call it a saucisson, but in the end it's still a dog turd.

And TPP is going to kill the Japanese economy if it gets passed.

[jwirr]

28. So you are saying that NAFTA had nothing to do with job lose in this country? And that is also has

nothing to do with wealth inequality?

[cui bono]

53. RW meme?

Show me liberals who are pro-NAFTA.

[jeff47]

12. You're making the mistake of thinking that NAFTA is about trade.

All of these "free trade" agreements are not about trade. We already had statistically insignificant tariffs around the world before all of the recent press for "free trade". Variations on exchange rates vastly dwarfed tariffs.

Instead, these trade agreements are about capital. Wanna move your slaughterhouse to Mexico so you can avoid USDA inspections? Before NAFTA, you could do that, but you'd have to label your meat as coming from Mexico. And consumers avoided it because of that label. Now, thanks to NAFTA, you can force the US to remove the "made in the USA" label from your competitor's meat.

Don't like environmental regulations? Move your company to Canada, and then sue California when that evil state dares to ban your highly profitable fuel additive.

And so on.

The jobs were lost not because of falling trade barriers. The jobs were lost because the treaties were rigged to create massive benefits for offshoring. Mexican and Canadian companies have benefits that US companies can not access.

[pampango]

24. Many will be interested to know that NAFTA was not about trade.

We already had statistically insignificant tariffs around the world before all of the recent press for "free trade". Variations on exchange rates vastly dwarfed tariffs.

Agreed.

The jobs were lost not because of falling trade barriers. ... these trade agreements are about capital.

Even FDR put protection for investors in his International Trade Organization. That is not the problem. The problem is that labor rights and the environment do not have similar protections in modern agreements.

Mexican and Canadian companies have benefits that US companies can not access.

Those damn Canadians and Mexicans! As long as the food I eat is safe to consume, I don't care whether it comes from Missouri, Alberta or Chihuahua. Americans, Canadians and Mexicans are equally capable of producing safe food products. Each national government should ensure that their consumers are protected no matter where the food is coming from.

[jeff47]

25. Well, the "giving a blowjob to Wall Street agreement" didn't focus group as well.

The problem is that labor rights and the environment do not have similar protections in modern agreements.

No. Because labor protections do nothing when the factory leaves the country. The union doesn't do you any good when there's no longer a workplace to unionize.

In addition, a Mexican union isn't going to keep the jobs in the US. Cost of living is so much lower that a Mexican union won't create wage parity.

Those damn Canadians and Mexicans! As long as the food I eat

No, it's not about food.

US companies have to just live with new US regulations, even if it costs the US company money.

Canadian and Mexican companies can demand the removal of US regulations, or demand compensation for new regulations. Meat labeling laws are an example of the former. MTBE regulation in CA is an example of the latter.

NAFTA means it's actually better for your company to move out of the US.

[pampango]

33. I don't believe that FDR was the "Wall Street" blowjob" kind of guy.

It was his idea to put investment and labor protections in trade agreements. Labor protections need to apply to every country or jobs will tend to move to those with weaker protections. FDR understood this.

Labor protections work in the EU because they cross borders. As with many other policies, Europe has put FDR's principles to work and proven that they are effective in creating strong unions and a healthy middle class.

No, it's not about food.

I only focused on food because you did. Again, we need common labor, environmental and consumer protections across the board in all three countries as they have across the continent of Europe. It should not matter where the product comes from (the US, Canada or Mexico) any more than a German consumer has to worry whether a product comes from Germany, France or Spain.

[jeff47]

41. We aren't in 1936 anymore, and our trading partners aren't only in Europe.

And FDR was in a world of high tariffs and relatively low international trade due to them.

We aren't in a high tariff world anymore. And we're not only trading with other "first world" countries. As a result, we need different agreements.

Labor protections work in the EU because they cross borders.

And cost of living isn't radically different between Germany and Italy. Thus wages aren't radically different between Germany and Italy.

Again, unions don't do you any good when the factory is gone. "Retraining" can not turn most 40-year-old former factory workers into a STEM workers. (And we're busy offshoring and H1B'ing those STEM jobs anyway)

I only focused on food because you did.

No, I provided one real-world example where NAFTA granted powers to non-US companies that are not available to US companies. Foreign slaughterhouses just won a ISDS "lawsuit". The US is now in the process of changing our labeling laws to make those foreign companies happy.

Again, we need common labor, environmental and consumer protections across the board in all three countries as they have across the continent of Europe. It should not matter where the product comes from (the US, Canada or Mexico) any more than a German consumer has to worry whether a product comes from Germany, France or Spain.

The difference is the EU countries already had extremely similar labor, environmental and consumer protections before forming the EU. We created NAFTA before that commonality, and there is zero effort in creating that commonality.

In fact, attempts to create that commonality mean losing ISDS "lawsuits". If Mexico adds regulations to their slaughterhouses to bring them up to the (incredibly lax) US standards, Mexico has to pay for lost profits.

[pampango]

45. Great post.

And FDR was in a world of high tariffs and relatively low international trade due to them.

We aren't in a high tariff world anymore. And we're not only trading with other "first world" countries. As a result, we need different agreements.

Indeed by 1944 it was not a 'high tariff' world anymore. FDR had achieved that. He wanted to insure that such a world could not easily return.

The International Trade Organization that he proposed and Truman negotiated and signed had 23 signatory countries, including Mexico, China and India, as well as Canada, Australia and European countries. So FDR and Truman were not just concerned with trade with Europe and the other 'first world' countries.

And cost of living isn't radically different between Germany and Italy. Thus wages aren't radically different between Germany and Italy.

Living standards in Germany's neighbor, Poland ($13,000 per capita), are less than 1/3 of Germany's ($46,000) today. And Polish living standards were much lower in 2004 when it joined the EU.

So there is a substantial difference between living standards in neighboring countries in Europe; even more so when you compare Germany to the newest members like Bulgaria and Romania. And yet Germany maintains a strong middle class, healthy unions and high wages. Germans (except for some on the far-right) don't blame their economic problems on Poland joining the EU in 2004.

They operate with the "European mentality". Your neighbors' problems are not just their problems. They are your problems too. If not now then in the future. It is better to help your neighbor, even at some pain to yourself, than to ignore their troubles in the hope that you will be insulated from them by a wall or something.

The difference is the EU countries already had extremely similar labor, environmental and consumer protections before forming the EU.

At the beginning of the EU that was true for the most part. Countries that have joined the EU since then have had to conform their "similar labor, environmental and consumer protections" to EU standards before they are allowed to join.

[Exilednight]

55. In a sense, you are correct, but in practice ....

You are wrong.

My food should be safe no matter where it comes from, but it's not. As a consumer I should have the right to know where my food comes from. I should be allowed to know what pesticides, if any, were used on crops.

The only way toake a knowledgable consumer decision is to be allowed to have the information.

I never believe that a piece of paper with a signature means that other countries will follow it, especially when you discover how corrupt third world and emerging market countries are.

[jwirr]

31. The question is not each country is capable of producing safe food products. The question is will

they? How is the USDA going to protect us from unsafe foods from other countries?

Truthful labeling would be the best route IMO. For one thing: say there is a mad cow disease out break. If the meat is not labeled should I then stop eating all beef? It is not US farmers who did not want to label meat - it was multinational corporations that took their business to another country where they do not have to meet the high standards we have here.

[pampango]

34. "How is the USDA going to protect us from unsafe foods from other countries?" The same way

that they protect me in Ohio from unsafe foods from other states - through inspections.

The USDA cannot inspect what's in my grocery store? Why not? If it can inspect California vegetables why can it not inspect those from Mexico or Canada? Are Canadians and Mexicans not capable of inspecting food for safety so that producers and consumers in all countries are treated equally?

[jwirr]

35. It is a matter of trust. As to inside the USA the USDA has the authority to do that. I will turn the

question around - why do you want to let products in from other countries unlabeled?

[pampango]

42. I don't want them "unlabeled". I want them to be 'labeled' (certified) as safe to eat.

We import cars, planes and many other things that are subject to the same certification standards as similar domestically-produced items. Manufacturers in Japan, Germany and other countries know our standards and meet or exceed them.

It is a matter of trust.

Agreed, although I have been known to trust Canadians and Mexicans, not just Americans, so perhaps that is where we differ.

[jwirr]

43. I trust most people but not with my food.

[pampango]

46. I don't trust everyone with my food either, but their nationality is not the issue. n/t

[okaawhatever]

48. That is actually one of the big points about TPP. There will be universal labeling standards (which

also makes it easier for smaller companies to export). The will have to at least meet our current standards. I realize that the American USDA can't inspect a plant in Vietnam, but the health/safety standards are in the agreement. What enforcement mechanisms the agreement contains will have to be learned when its finalized.

I know they will be as strong as possible because the idea of the TPP is to bring everyone's standards up to ours (which will make their costs similar to ours). That is the reason China can't join. They don't have the labor/health/safety/copyright/environmental laws that we all do. It is what makes their goods cheaper, but it is also killing us in trade.

Remember, a lot of the countries in TPP have high standards like we do regarding food. Canada, Australia, New Zealand and Japan's food is as safe as ours. If the TPP becomes law you will be able to eat kangaroo meat or vegamite sandwhiches without concern.

[Art_from_Ark]

52. Universal labeling standards

What a joke.
I have just finished reading a book written by a former Japanese minister of agriculture who has been involved with TPP negotiations. According to him, as a result of TPP, Japan would not be able to put "遺伝子組み換えでない" ("Does not contain GMO&quot on its food labels, and would not even be able to show country of origin because that would "hinder" "free trade". And Japan's food is actually safer than American food because it is grown with fewer chemicals and fewer growth hormones, and overall contains fewer additives and more natural ingredients. TPP has the potential to actually bring Japanese standards DOWN to American levels.

[cui bono]

54. Yeah, just look at the WTO ruling on the meat labeling.

Universal labeling means no one gets to put anything on there that the others object to. It's like lowering it to the lowest common denominator. That's never a good thing.

If it had anything to do with free trade, everyone could label as they like and if people don't want it tough luck, make a better product.

[brentspeak]

17. NAFTA made it easy for US manufacturing to relocate to Mexico

And thus made it legally possible to create sweatshops which could not legally exist within the USA:

http://epi.3cdn.net/fdade52b876e04793b_7fm6ivz2y.pdf

From the standpoint of the business community, NAFTA’s most important achievement was that it made Mexico a much safer and more attractive location to invest and outsource U.S. manufacturing production. NAFTA’s investment provisions created new and improved safeguards for foreign investors, including new dispute settlement tribunals providing a mechanism for settling disputes with foreign governments outside of the Mexican legal system.

By eliminating Mexico’s developmental state and use of local content rules, and other demands and conditions on foreign investors, the trade agreement greatly reduced the cost of doing business in Mexico, and increased the security of those investments.

It's pointless to emphasize that you already knew this information but refused to divulge it within your pro-NAFTA propaganda post.

[pampango]

21. Do you think that WTO rules would not protect manufacturers in Mexico as they have

elsewhere in the world? We never had a "NAFTA-style" agreement with China or Brazil or South Africa and manufacturers seem to have been just fine with the protection provided by the WTO.

[Art_from_Ark]

5. If you think that's bad...

NAFTA was just the warm-up. TPP is where the shit's really gonna hit the fan.

[okaawhatever]

7. The EPI report is deeply flawed. The Congressional Research Service came out with

this report.

http://fpc.state.gov/documents/organization/34486.pdf

This study doesn't look at the impact for Canadian trade. Canada is our current #1 export destination with Mexico being number 2. There were other benefits realized by NAFTA that aren't addressed here.


The CRS examined 4 studies done on NAFTA (they threw out the EPI study & the one done by Pete Peterson) and here are a couple of their conclusions:


NAFTA had little or no impact on aggregate employment.

NAFTA is at the heart of a long-standing debate over the employment effects of trade because of fears
that trade with developing countries causes U.S. job losses and that trade deficits equate
to higher unemployment. None of the reports attributed changes in aggregate U.S. or
Mexican employment levels to NAFTA, but the author of the first chapter of the Carnegie
study suggests that changing the assumptions of a USITC model would allow for a net
gain in U.S. employment over the past decade of between zero and 270,000 jobs, a small
increase. For Mexico, it concludes that “the sum of the effects of the trade pact to date
has not been a strong net gain in overall employment.” The second chapter (different
author) argues for zero net growth in U.S. jobs. The USITC study demonstrates, contrary
to some popular opinion, that U.S. trade deficits tend to occur during periods of low
unemployment, and “vice versa.” This evidence supports well-established economic
theory that would suggest both the U.S. trade deficit with Mexico and U.S. employment
levels over the past decade were responding to economic growth, not each other.9
NAFTA contributed to employment shifts among sectors. The Carnegi


NAFTA did not cause the widening U.S. trade deficit with Mexico.

From 1994 to 2002, the U.S. trade deficit with Mexico grew from -$1.4 to -$37.1 billion. These
studies found that trade deficits are largely macroeconomic phenomena, in this case
predominantly attributed to the respective business cycles in Mexico and the United
States. Strong U.S. growth in the 1990s combined with Mexico’s deep recession caused
by the December 1994 peso crisis (devaluation) were the main factors cited for the large
deficits. Importantly, none of the studies attributed the peso crisis to NAFTA, but to
structural misalignments in the Mexican economy combined with political events.5

Outlook

The four studies discussed above point to three broad themes. First, by most
aggregate measurements, NAFTA has had only a modest, but positive, effect on the U.S.
and Mexican economies and tends to reinforce long-term trends already evident by its
inception. This is in keeping with what is widely understood about trade and trade
agreements; they work at the margin of economies and their effect can be easily confused
with much more powerful factors such as long-term structural change and short-term
volatility (e.g. financial crises). Such confusion is seen in the reluctance of many
supporters and opponents of NAFTA to engage in a more nuanced debate on trade.

Second, adjustment problems related to trade liberalization present the greatest
challenge to policy makers. For export firms and sectors, the adjustment is positive and
provides evidence of the winners from trade. For import competing sectors, displacement
can have devastating effects on communities and raises the question of whether to fight
freer trade or attempt to adjust to it as part of the larger global integration process. The
World Bank report argues that trade agreements can do more by improving distorting
rules of origin, taking on the hard tasks of antidumping and countervailing duty measures,
and tackling adjustment problems. The Carnegie Endowment study argues that trade
agreements should address trade-related adjustment issues through longer tariff reduction
schedules, use of special safeguards, removal of agricultural subsidies, and provision for
regionally funded trade adjustment assistance and social safety net programs.14

Third, two studies address a common call for better integration of trade policy into
a country’s overall development program by coordinating and supporting it with domestic
reforms. The Carnegie study argues for more attention to agricultural, environmental,
immigration, tax, and labor rights protection policies, among others. The World Bank
study prioritizes institutional reform (especially rule of law and anti-corruption efforts),
educational development (to promote technology transfer), other innovation supporting
policies, and labor reform that facilitates employment transition among industries and
sectors.15 In the end, these reports do not provide easy answers to trade-related policy
problems, but do attempt to explain how the gains from trade may be enhanced by
understanding and responding better to the adjustment challenges all countries face.

Remember, we're Democrats We want the truth even if it doesn't align with our current thinking.

[pampango]

8. Had never seen this before. Thanks for posting it. n/t

[brentspeak]

11. That CRS report is over ten years old

And therefore is not a rebuttal to any of EPI's studies which have been released in the past few years.

"Remember, we're Democrats We want the truth even if it doesn't align with our current thinking"

You could be the senior policy director for the Heritage Foundation, for all I know. Your posts concerning Elizabeth Warren -- as well as your general bull$hit promulgating TPP -- say a lot about you.

[okaawhatever]

23. The EPI study, and the claims made in this "report" are laughable. A sixth grader can see the

failure of the methodology. I don't have time to go through the myriad erroneous claims, but in any study/report there are red flags that point to it being propaganda and not data.

For example:
They don't use the same years for their different claims, they've cherry picked time frames that support their conclusions

They don't account for other factors affecting trade and employment. There were huge trade deficits racked up, but they were due to the deep recession that Mexico went into shortly after the signing and the economic boom the US went into. And no, the recession didn't have anything to do with NAFTA, it had to do with their currency and other internal problems. Mexico's imports went down across the board, not just with the US. Countries in deep recession don't have the same demand for goods, this is economics 101. For your reports authors to attempt to assign the deficit solely to NAFTA is academic fraud.

Much of the growth in imports from Canada comes in the form of unrefined oil. It is refined in our refinieries and then exported to non-NAFTA countries. This isn't hurting American jobs, in fact it increases them, because the product isn't being consumed in our country. They aren't telling you that because it doesn't support their agenda.

Here is an example of their claims:

According to the U.S. Bureau of Labor Statistics, two out of every three displaced
manufacturing workers who were rehired in 2012 experienced a wage reduction, most of
them taking a pay cut of greater than 20 percent.8

Why did they just pick one year out of 20 for that statistic? Simple, because the manufacturing workers going back to work were laid off due to the housing crisis/recession and not NAFTA and that was the year that made their numbers look good.


Your report is so pathetic, I don't have time to dispute all their erroneous and misleading information. It is propaganda, pure and simple.

[jeff47]

18. Except your report stops when the story would be bad for NAFTA.

Those "structural misalignments in the Mexican economy" include things like NAFTA destroying Mexico's agricultural sector.

US farms were highly automated and industrialized, and received large subsidies thanks to Iowa's caucuses. Mexican farms were not automated and industrialized. As a result, Mexican farms employed a lot more people than US farms. That lead to a higher cost for commodity products like corn in Mexico.

Enter NAFTA. US farmers crushed Mexican farmers while not producing many jobs in the US - remember our farms are highly automated and industrialized. That lead to massive unemployment in Mexico. Mexico responded with what your report labels as the "peso crisis". That, coupled with the large number of now-unemployed Mexicans lead to a massive drop in wages in Mexico, which made it much more attractive to close the US factory and open a Mexican factory.

Btw, most analysis supporting NAFTA seems to think factories appear overnight and are fully staffed the following day. That isn't the case.

Also, your report attempts to bury the most significant numbers with lame excuses. Trade with Mexico goes from -$1.4 to -$37.1 billion?? That's kinda a big fucking deal.

Finally, your report is 10 years old. Remember the part about factories not appearing overnight?

[okaawhatever]

36. No, the report dosn't get bad for NAFTA. I only picked out the parts that directly addressed

his statements, plus I added the overview.

Your information isn't correct on several points:

1. The Peso Crisis didn't have anything to do with the farmers. In fact, it happened the same year NAFTA went into effect, before there were agriculture issues. It had to do with politics, foreign investment, local strife, currency issues and the assassination of the Presidential candidate.

For more info see wiki. All the info is from legitimate sources, most from Brookings, The Economist and economics textbooks.

http://en.wikipedia.org/wiki/Mexican_peso_crisis

2. Mexican farmers were given subsidies to help with the effects on NAFTA. Some $20 Billion dollars worth. Farm jobs were lost, that was expected and provisions were made to help them. If Mexico is to decrease their poverty, they can't rely on labor intensive practices that don't allow them to compete in the market. Of course, part of the problem was the corruption in Mexico and how too much of the money went to the larger companies and to graft. Excellent report on that from the Woodrow Wilson Center for International Scholars. It's titled Subsidizing Inequality: Mexican Corn Policy Since NAFTA

http://www.wilsoncenter.org/sites/default/files/Subsidizing_Inequality_Ch_0_contents_and_summary_findings.pdf

3. Yes, the devaluation of the Peso led to companies moving there that hadn't planned to. But again, the Peso Crisis wasn't caused by NAFTA, and even without NAFTA the report finds that companies would have moved there anyway. The Peso Crisis and deep recession changed everything. The question becomes, which events occured because of the peso crisis and which occured because of NAFTA.

4. The report doesn't "bury the most significant numbers with lame excuses". The trade deficit is explained and backed up by verifiable data. The US has a boom, we added 22.5 MILLION new jobs in this country. When that happens demand increases. Demand for imports grew from every country. Not only did we have a hugely increased demand for goods, Mexico's goods were now cheaper than ever due to the Peso devaluation. Mexico had a deep recession losing almost 10% of its GDP. As a result, their imports decreased. The question is, was it a result of NAFTA? The answer is no see point #1.

NAFTA had a modest effect on U.S.-Mexico trade growth.

The CBO, World Bank, and USITC approached the problem differently, but all found that NAFTA
had a modest effect on U.S.-Mexico trade growth. The CBO model of U.S.-Mexico trade
estimated that 85% of the U.S. export growth and 91% of U.S. import growth would have
occurred without NAFTA. Although the effect was modest, it accelerated over time,
accounting for a 2% marginal growth of U.S. exports and imports in1994 up to11% and
8% marginal growth of U.S. exports and imports in 2001. As a percentage of economic
activity, the increased trade was more pronounced for Mexico than the United States.
Separately, the World Bank makes the point that NAFTA has reinforced existing trends
in trade growth and estimates that Mexico’s global exports would have been 25% lower
without NAFTA.2

So NAFTA increased imports 9% and increased EXPORTS 15%, and as noted something that has grown over time. They also found that Mexico's exports to countries other than the US has increased 25%.

5. Yes the report is 10 years old. The EPI report from 2011 deals with NAFTA up until 2006. It claims that the job losses from 2007-2010 were economy wide. (due to the recession).

As of 2010, U.S. trade deficits with Mexico totaling $97.2 billion had displaced 682,900 U.S. jobs. Of those jobs, 116,400 are likely economy-wide job losses because they were displaced between 2007 and 2010, when the U.S. labor market was severely depressed.

Note that the author of this article, Robert Scott, refers to job losses as a result of the "trade deficits with Mexico" and not NAFTA. His methodology is to take the dollar amount of trade deficit and calculate the number of jobs striclty from the amount of the trade deficit. He doesn't look for ACTUAL job losses. Based on his methodology, if a factory in Mexico makes $1 widgets to export to the US, then switches to making $10 wigets Americans have lost jobs. The number of imports hasn't changed, nor has a single American lost a job, but to him there is now a higher trade deficit and his methodology says that increased trade deficit means lost jobs. A sixth grader can see the logic fail there. Besides, why is he using that when there is ACTUAL data available?

[jeff47]

38. Yes, it really does.

1. The Peso Crisis didn't have anything to do with the farmers. In fact, it happened the same year NAFTA went into effect, before there were agriculture issues.

It started the same year NAFTA went into effect.

Remember the bit about factories not instantly relocating? Macroeconomics isn't instant either.

2. Mexican farmers were given subsidies to help with the effects on NAFTA. Some $20 Billion dollars worth. Farm jobs were lost, that was expected and provisions were made to help them.

Those provisions were the subsidies. The subsidies weren't tied to keeping those workers employed.

3. Yes, the devaluation of the Peso led to companies moving there that hadn't planned to. But again, the Peso Crisis wasn't caused by NAFTA, and even without NAFTA the report finds that companies would have moved there anyway.

Then why work so hard to blame it on the peso crisis? If it truly was irrelevant, why bring it up?

Because it is relevant, and needs to be excused away.

The US has a boom, we added 22.5 MILLION new jobs in this country. When that happens demand increases. Demand for imports grew from every country.

First, that would be true if the US was the only booming country. Far from it.

Second, back in the "old days", we used to actually expand manufacturing in the US. I know, it's a weird thought that we could actually supply our own goods and services.

Mexico's goods were now cheaper than ever due to the Peso devaluation. Mexico had a deep recession losing almost 10% of its GDP. As a result, their imports decreased. The question is, was it a result of NAFTA? The answer is no see point #1.

Except you just declared the peso crisis irrelevant in #3. So which is it? Are you wrong in #1 or #3?

So NAFTA increased imports 9% and increased EXPORTS 15%,

Did you know going from $100B to $105B is a 5% increase? And going from $1 to $2 is a 100% increase?

In other words, the percentage increase alone is utterly meaningless. But it's a great statistic to throw out when you don't have an actual argument.

Note that the author of this article, Robert Scott, refers to job losses as a result of the "trade deficits with Mexico" and not NAFTA.

Because NAFTA has no effect on trade deficits with Mexico.

if a factory in Mexico makes $1 widgets to export to the US, then switches to making $10 wigets Americans have lost jobs. The number of imports hasn't changed, nor has a single American lost a job, but to him there is now a higher trade deficit and his methodology says that increased trade deficit means lost jobs. A sixth grader can see the logic fail there.

As with most NAFTA supporters, the logic fail is your own. As usual, you stop the analysis before it looks bad.

Where did the $10 widgets come from before they were made in Mexico? Most likely in this trade relationship, they were made in the US. And most likely, fewer $10 widgets were made before the factory moved to Mexico, because they were $20 widgets. Those US workers lost their jobs so that more $10 widgets could be made, and thus those workers bought fewer goods and services from businesses in their community. Causing other people to also lose their jobs - no one's buying pizza, so they don't need as many delivery guys.

Again, you can't stop the analysis when it starts to look bad.

Oh, you also forgot to talk about the benefits Canadian and Mexican companies have in the US that are not available to US companies due to NAFTA.

And that isn't surprising at all.

[Thinkingabout]

29. Having read several reports how jobs has been lost, I have not seen a sturdy which gives

information on how much technology advancements have overtaken many jobs during this 20 years. My job has reduced from 498 people to three people because of technology advancements. Actually the loss of some positions happened before NAFTA was enacted so I don't see how the trend to loss of positions in these studies.

[jeff47]

40. You deal with those by looking at changes in trade between the countries.

Those 495 lost jobs shouldn't cause a significant direct change in trade between the countries involved. Manufacturing is still in the US.

There are secondary effects - the now-unemployed aren't buying goods and services, a presumably that has an effect on trade.

So you won't be able to get a hard number, but you should be able to see an approximate number. But nothing in macroeconomics can produce hard numbers - real economies have far too many confounding variables for exact measures.

[Thinkingabout]

49. These job losses was due to rechnology advancement, I rather think the

This information will not be included in changes in trading.

[jeff47]

50. Right. That's how you exclude those losses from the analysis. (nt)

[AzDar]

10. The screwjob so nice... they want to do it twice.

STOP THE TPP!

[Baitball Blogger]

13. And the TPP will be NAFTA cubed.

[Bluenorthwest]

15. It's too bad you are part of the 'social issues don't matter' crowd because some of the strongest

arguments against TPP involve human rights, trafficking, access to medicines and other issues that have been leading in the organized opposition to this legislation but which is glaringly absent from DU. These are not issues that can be obscured with counter information, these are not matters of theory and debate, these are simple questions. But DU won't ask them, because the treatment of humans is not what concerns DUers. They care about their own money and political persons they like and don't like, that's it, that's all there is to it.
TPP seeks to give favored status to Brunei, a country which openly says it is putting anti gay laws in place to protect their culture from globalization, that is they are creating these laws so that they can enter TPP to profit while rejecting all questions of decency, equality or basic human rights. The Sultan and his family are exempted from the religious laws being put in place for everyone else.
If Brunei was doing to any other minority that which it is doing to LGBT, those who support it would not support it, they support it only because they do not see LGBT people as human beings.

People are starting to finally talk about Malaysia and human trafficking there, but Brunei goes without criticism even from those who are making lots of TPP criticisms. It's indicative of the problems LGBT people face, we have opponents but no actual allies.

[L0oniX]

19. Silly. That was 20 years ago. You can't keep blaming the Clintons for that forever.

[WillyT]

22. HUGE K & R !!! - THANK YOU !!!

[Spiggitzfan]

30. Recent book with analysis of how NAFTA effected real ppl

I read the book "Boom Bust Exodus" recently. The author has combed through research & data & real-time journalism covering NAFTA over decades, and presents a sobering picture of how it effected real people's lives in both America and Mexico, after the American jobs went south. It's not pretty. And it left me very uneasy about this new trade deal.

[Hoyt]

32. Let's assume for a moment that Public Citizen is right and we lost 1 million jobs to Mexico/Canada.

Do you think we would not have lost most of, if not all of, those jobs to other countries?

Plus, these groups calculate the job loss be applying a factor to the trade deficit between countries, assuming the jobs otherwise would have remained here. That's just wrong, but people believe it.

But, let's just assume NAFTA "cost us" 1 million jobs -- First, the jobs went to someone who probably needed them as badly as us, if not worse. Second, that only equals 0.73% of the jobs in this country. So there are a heck of a lot of other jobs available. In fact, during most of NAFTA the unemployment rate was at very low levels.

I get that it's tough if someone loses their jobs, but very few of us have had the same job all our lives. In any event, that is why assistance for job loss and retraining is so important.

But, back to reality. NAFTA didn't wreck our economy and take everyone's jobs. Tax cuts for the rich and technology are as responsible for inequality and job loss as anything. And, we better start pushing for a guaranteed living income, because a lot more jobs are going to be lost due to technology and foreign competition that we can't stop, nor should we even try.

[okaawhatever]

37. Yes, and Mexico had been losing jobs to China before signing NAFTA. Also, the 1 million

figure (totally bogus) is over 20 years. During the 10 years after NAFTA we GAINED 22.5 MILLION JOBS, Another way to put it is that it is about 5 weeks of Obama's job growth rate of the last couple of years. Think of the effect on this country if we hadn't had any new jobs for the last 5 weeks. Would it devastate us the way NAFTA critics are claiming? NO!


One of the plusses for Mexico is that they have become more productive and efficient. The numbers are in the Wilson report I linked to in an earlier thread. Mexico has also increased their exports to other countries 25%.

[Hoyt]

39. It will be nice when Mexico advances similar to us or Canada. North America will be a cool place

to live. But, the Nationalists can't see beyond America First, and my job matters more than anyone else. We will benefit from an advancing world, at least those who don't try to hold on to the old ways.

[a la izquierda]

56. Have you ever been to Mexico?

Productive and efficient are not the top two words I'd associate with life here.

[bigwillq]

47. We must put Mr. and Mrs. Nafta back in the White House!!!!1111

[orpupilofnature57]

51. She won't take credit for that or the TPP .