From Economy in Crisis:
In the early 1990s the North American Free Trade Agreement was sold to the American people by promising endless benefits job creation and rising incomes for U.S. workers, cheaper goods for American consumers and unseen surges in exports to markets that had never before been open to U.S.
After initially embracing NAFTA on false pretenses, the first myth to be busted was the promise of an increase in trade surplus with Mexico. While the U.S. held a small trade surplus with Mexico prior to NAFTA, by 2007 that turned into a $91 billion trade deficit. With Canada and Mexico combined, the U.S. has turned a $24 billion deficit into a $190 billion deficit in just 15 years - an astounding 691 percent increase.
NAFTA has outsourced jobs to Mexico where labor is incredibly cheap and the environment is a mere after-thought, thus driving down wages and forcing American workers into more direct competition with one another. U.S. manufacturing employment declined from 16.8 million people in 1993 to 13.9 million in 2007.
Over 20 percent of our country’s good manufacturing jobs have been lost during the NAFTA-era, only to be replaced by low-paying service sector jobs with little or no benefits.
Instead of creating jobs, NAFTA has sent revenues across the border where iconic American companies such as Coca Cola, Ford, General Motors, and General Electric have opened up production facilities in Mexico. The average line worker in a U.S. factory earns $18 per hour, whereas his Mexican counterpart will be lucky to make $3 per hour. Since 1993, 15 percent of employers in manufacturing, communication and wholesale distribution have shut down or relocated.
1993 300,000 family farms have been put out of business. Each year we import over $71 billion in food products - double the total pre-NAFTA. Those farmers lucky enough to survive are hanging on by a thread. Net farm incomes have declined by 13 percent over the last 15 years.
NAFTA eliminates tariffs, one of the few proven weapons to protect the U.S. against cut-wage competition and other predatory practices used to destroy our industry and subjugate our economy.
Eliminating tariffs through "free trade" means companies have no choice but to locate their production facilities in countries with the lowest cost labor sources. Otherwise, they will go out of business fighting those who do.
How can the United States remain a superpower if we rely on others to produce our goods? We must stop forcing U.S. companies to outsource, relocate, or buy from foreign suppliers. It must be profitable to produce in the United States. Money we spend on imports returns to buy us out. The majority of many goods we consume are now made by foreign corporations or by foreign owned U.S. corporations. This is an intolerable condition we cannot allow to continue.
http://www.economyincrisis.org/articles/show/1956
3 comments:
Thankfully, there will soon be a President who stands with the Teamsters and other unions on the sending of American jobs to un-unionised, child-exploiting sweatshops in Asia and Latin America.
A President who stands with the black, Irish and Scots-Irish working classes on sending their sons off to be harvested in pointless, unwinnable wars on behalf of others in American society who do not pull their weight militarily.
And a President the core of whose core support, which he will have to keep happy in order to secure a second term, is not only the morally conservative mainstay of things like the Alliance for Marriage, but is also made up of the people most opposed to illegal and even much legal immigration, and whose views on the status of English make them the South Welsh of America.
This account cannot be considered objective. In fact the flow of nillions of Mexicans workers into the United states during the last 20 years testifies to the failure of Nafta to creat jobs in Mexico. If the jobs did not go to Mexico, where did the go? The answer is China. Indeed the failure of Mexico to thrive under Nafta is largely due to the failure of the Mexican economy to compete with China. So why beat up on Nafta?
Thanks to my fellow bloggers David and Charles for their comments.
Charles makes a good point that China is much more of a economic threat than Mexico and that our neighbors to the south are also being hurt by China. We are running a large trade deficit with Mexico although it does not seem to be translating into a widespread prosperity for the Mexican people.
In my view, NAFTA was a bad move because it weakened our U.S. industrial base. I would rather import from Mexico than China but would prefer that the U.S. retains as many manufacturing jobs as possible.
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