Is NAFTA Really That Bad?

I've been doing a lot of reading lately about NAFTA since Obama and Clinton say they'll renegotiate it or pull out of it. 

I came across this article the other day and would like to hear people's opinions about it.

I'm just looking for more information and would like to hear what people think.

Our view on free trade: Bashing NAFTA misses real reason for factory job losses

As they go at each other in Ohio, presidential candidates Hillary Clinton and Barack Obama seem to be suggesting that the North American Free Trade Agreement has been a disaster. Both Democrats have vowed to renegotiate the agreement with Mexico and Canada or pull out of it altogether.

NAFTA opponents point to the 2.4 million U.S. manufacturing jobs that have disappeared since NAFTA took effect in 1994, a drop of about 14%. In Ohio, site of Tuesday's hotly contested primary, manufacturing jobs are down by nearly 200,000, or 20%, during the same time.

NAFTA supporters — this page among them — usually respond by pointing out that 39 million jobs outside of manufacturing have been created in that time in the USA. Even Ohio has seen a net gain of 900,000 jobs, including 60,000 in finance, 80,000 in professional services and almost 190,000 in health care.

The reality is that NAFTA has relatively little to do with either the overall job losses or job gains. China is a far larger factor. But the number that best displays the nonsensical nature of the debate is 66% — the increase in the manufacturing output of American industry since 1993.

It's impossible to look at an economy that has increased its manufacturing output so dramatically while simultaneously cutting its manufacturing workforce and not see a much larger force at work than NAFTA.

That force has been the unprecedented and sweeping gains in worker productivity that have allowed U.S. companies to churn out more goods with fewer people. Some of this has come from outsourcing the most labor-intensive parts of manufacturing, particularly to Asia. But much of it is from the use of more automated systems for assembly lines and high-tech inventory management.

Put another way, the main job killer of the past 14 years has not been the "giant sucking sound" of jobs going to Mexico, as enunciated by Ross Perot. Rather it has been that giant humming sound of machines replacing humans.

Overall, this increased productivity has led to rising living standards and made the American economy more competitive. It has also left some people behind at a cost of considerable personal pain.

But to make NAFTA a centerpiece of the debate over the manufacturing economy is cheap pandering. Modifying or scrapping NAFTA wouldn't create jobs or more skilled workers. The idea raises false hope and seeks to scapegoat Mexico and Canada.

The only real answer to the problem of declining employment in manufacturing lies in educating younger workers and retraining older ones. This is, to be sure, a big challenge and a tough sell politically. American schools continue to underperform, particularly in technical knowledge. And most federal retraining programs have failed.

Any other answer, however, is simply not responsive to the problem — a workforce with too many people lacking the skills to prosper in a global economy and climb into the middle class. Fixing this is both essential for the economy and vital to U.S. democracy.

For these reasons, it would be nice to hear more from senators Clinton and Obama about creating a more educated workforce — and less about why they hate NAFTA. In 2004, before they were trying to win the Ohio primary, Clinton said "on balance NAFTA has been good" and Obama said the USA "benefits enormously from exports" under NAFTA. They had it right the first time.

The main thing that I feel is wrong with NAFTA and the rest iof AFTAS is the Arbitration System it uses.  It take the $ out of $overeignty.  It usually guarantees America will lose the arbitration.

Yes ,nafta is a bad thing.As far as the democrats saying they are going to reform it or get rid of it all together, it is a smoke screen.They will never touch it.

I am not a economist,but I think it would be better trying to some how put back American pride in our products and become more isolated from the rest of the world.,instead of  making either our enemies or potintial enemies better off for we might be at war with them someday.That to me is dangerous.Alot of our trading partners bad mouth us anyway. Bottom line, I think it would do more harm then good.

ConcernedMom said:

I've been doing a lot of reading lately about NAFTA since Obama and Clinton say they'll renegotiate it or pull out of it. 

 They 'say' they'll renegotiate NAFTA - I call BS.  How will they do so?  This is political rhetoric.  Hillary has NO plans on pulling out of NAFTA...if they 'renegotiate' - or decide to change it - you can bet...it will only benefit big business MORE.

NAFTA was the most unAmerican trade agreement and America has suffered as a result of this nightmare. 

 http://www.ratical.org/co-globalize/N...

http://www.epi.org/content.cfm/briefi...

Concerned Mom, thanks for the article. I have one answer to this paragraph:

"Put another way, the main job killer of the last fourteen years has not been the "giant sucking sound" of jobs going to Mexico as enunciated by Ross Perot.  Rather it has been that giant humming sound of machines replacing humans.

Is that right???? Well then why do we "desperately need illegals to fill the jobs that Americans won't do"??? Why the fight by corporate America to keep this steady stream of cheap labor coming over the border? And why is our government feeding this need by ignoring our laws and coming up with reason after reason for the fence not being built.  And why do we have Border Patrol Officers in jail?

This is a pathetic argument by the writer who so obviously represents the elitists seeking to further promote globalism (read NAFTA and NAU).

I rest my case.

Yesterday I was able to have a brief conversation with Rob Portman - see link:

http://www.whitehouse.gov/news/releases/2007/02/20070205-3.html 

I must review our discussion before repeating it, however, he had an interesting comment on NAFTA.

We buy 80% or more of our crude oil from Canada. Bet most of you did not know this. (As a side I know we buy nothing, nada, zero, zilch from Iraq)

Canada has HUGE reserves. We also do but the libs won't let us touch it.

Rob said that due to NAFTA Canada is required to sell its oil to us and anyone else at fair market value. No favorites. Without NAFTA we have no protection.

China is pounding on Canada's door to stop selling it to us and sell it to them at much higher prices.

Bet you won't find this anywhere in the MSM.

Does anyone have any idea how negatively this would impact us?

Everything Hillary or Obama want to do WILL destroy us.

We have the same resources as Canada, there is no reason we need oil from Venezuela or Iran or Canada or Mexico.  If Hitler could make gasoline out of coal in the forties and we can go to the moon and mars etc we should be able to make clean gas out of coal.  And we could do it alot cheaper then the trillions spent if it were true we did Iraq for the oil.  Where's that logic?

President Bush does not have dictatorial powers like so many think.

He is hamstrung by the Dems and there is no getting around it unless we change the way we vote.

ConcernedMom said:

I've been doing a lot of reading lately about NAFTA since Obama and Clinton say they'll renegotiate it or pull out of it.

I came across this article the other day and would like to hear people's opinions about it.

I'm just looking for more information and would like to hear what people think.

Our view on free trade: Bashing NAFTA misses real reason for factory job losses

Fri Feb 29, 12:22 AM ET

As they go at each other in Ohio, presidential candidates Hillary Clinton and Barack Obama seem to be suggesting that the North American Free Trade Agreement has been a disaster. Both Democrats have vowed to renegotiate the agreement with Mexico and Canada or pull out of it altogether.

 

NAFTA opponents point to the 2.4 million U.S. manufacturing jobs that have disappeared since NAFTA took effect in 1994, a drop of about 14%. In Ohio, site of Tuesday's hotly contested primary, manufacturing jobs are down by nearly 200,000, or 20%, during the same time.

 

NAFTA supporters — this page among them — usually respond by pointing out that 39 million jobs outside of manufacturing have been created in that time in the USA. Even Ohio has seen a net gain of 900,000 jobs, including 60,000 in finance, 80,000 in professional services and almost 190,000 in health care.

 

The reality is that NAFTA has relatively little to do with either the overall job losses or job gains. China is a far larger factor. But the number that best displays the nonsensical nature of the debate is 66% — the increase in the manufacturing output of American industry since 1993.

 

It's impossible to look at an economy that has increased its manufacturing output so dramatically while simultaneously cutting its manufacturing workforce and not see a much larger force at work than NAFTA.

 

That force has been the unprecedented and sweeping gains in worker productivity that have allowed U.S. companies to churn out more goods with fewer people. Some of this has come from outsourcing the most labor-intensive parts of manufacturing, particularly to Asia. But much of it is from the use of more automated systems for assembly lines and high-tech inventory management.

 

Put another way, the main job killer of the past 14 years has not been the "giant sucking sound" of jobs going to Mexico, as enunciated by Ross Perot. Rather it has been that giant humming sound of machines replacing humans.

 

Overall, this increased productivity has led to rising living standards and made the American economy more competitive. It has also left some people behind at a cost of considerable personal pain.

 

But to make NAFTA a centerpiece of the debate over the manufacturing economy is cheap pandering. Modifying or scrapping NAFTA wouldn't create jobs or more skilled workers. The idea raises false hope and seeks to scapegoat Mexico and Canada.

 

The only real answer to the problem of declining employment in manufacturing lies in educating younger workers and retraining older ones. This is, to be sure, a big challenge and a tough sell politically. American schools continue to underperform, particularly in technical knowledge. And most federal retraining programs have failed.

 

Any other answer, however, is simply not responsive to the problem — a workforce with too many people lacking the skills to prosper in a global economy and climb into the middle class. Fixing this is both essential for the economy and vital to U.S. democracy.

 

For these reasons, it would be nice to hear more from senators Clinton and Obama about creating a more educated workforce — and less about why they hate NAFTA. In 2004, before they were trying to win the Ohio primary, Clinton said "on balance NAFTA has been good" and Obama said the USA "benefits enormously from exports" under NAFTA. They had it right the first time.

 

 

Read the story online.

Yes, it's that bad. Actually, the problem is the SUBSIDIES for American companies to off-shore production. Just one story in the news currently.

Boeing Wichita is screaming its head off regarding the awarding of a military contract to a Eurpoean consortium, EADS, otherwise known as Airbus. The jobs are actually going to be here, on American shores, but the money that doesn't go into the salaries of locals, will be leaving this nation - at least I think it will. I don't know for sure if there are regulations about taking earned wealth out of America.

Boeing is cracked to be screaming its head off after its push for globalization. What the heck did they expect after farming out everything, almost everything, on its commercial side to Russia, Turkey and China? What did Boeing expect after selling its commercial enterprise in Kansas to Canada? Did Boeing really keep the military side because it was hoping it would get this tanker contract? Boeing betrayed the American people, showed them that it really doesn't matter who makes the airplane, so how can they complain now?

 The article is only one side of the story.  There is actually a net loss when all factors are considered.  I suggest you go to www.tradewatch.org, or go to c-span.org and order yesterday morning's Washington Journal episode.  They had Carla Hill from the Bush I administration and a rep from Global Trade Watch.  The Global Trade Watch rep knew all of the statistics and just blew Carla Hill away.  At the end of the debate, Carla Hill was madder than a hornet because she had been bested, with those statistics.  I've requested a copy of that debate from cspan and once it comes through, I'll post the transcript here for all to read for themselves.

Greg Badger said: We may not need oil from Canada. There are Democrat liberals fighting us tooth and nail to stop us from using our own. Why don't we just shoot them?

DO you personally know anyone who has worked in the oil industry? I do know someone and I can tell you that if the oil companies wanted to do so, they could uncap the capped wells. If you really think ANWAR would take care of all of our needs, think again. Besides which, no oil is going to be enough once there are 500 million chinese and asian indians driving cars. The price of oil is going to continue to go up and up and the oil will get sold to the highest bidder and that may or may not be us.  One more thing, one of the problems with gasoline in America is that the companies won't build any more refineries.

Concerned Mom,

There is a degree of truth in the article you posted and there is some truth in the folowing posts.  The worst thing about NAFTA, is as was noted in the very beginning, it wasn't a free trade agreement.  It was an agreement in the direction of free trade.  It ended or reduced some trade barriers, but erected some new ones and increased some existing ones.  The net effect was supposed to be freer trade, but in fact, there were winners and losers.  Don't know if the winners won more than the losers lost, but it was clearly inequitable.  All trade barriers create winners and losers and often the results are unpredictable and unintended.  This is why it would actually be better if the government just unilaterally got out of the way of trade.  Countries with more trade barriers generally are less well off.

The technology that got us to the moon has indeed been employed in industry.  Factories are much more productive than ever before.  American factories (outside of chemicals and and healthcare) generally don't do much consumer product manufacturing.  It isn't as profitable as other things.  Manufacturing profits aren't high enough to compete with other ways to invest money.  And it is true that fewer employees are needed to produce the same quantity of goods as in earlier times.

Andwhile it is possible to uncap closed in wells and build new refineries, it just isn't financially attractive even at today's prices. 

And while it is possible to uncap closed in wells and build new refineries, it just isn't financially attractive even at today's prices.

 But it IS attractive for other types of fuels to be produced and that is what is happening and why food prices are skyrocketing.

Food prices are skyrocketing because liberals want to go from 10% ethanol to 15% ethanol and so pig feed and every other feed price is skyrocketing.

The opposite of liberals stated intended results is always what we get.

More feel good stupidity.

Well, thanks everyone for your educated opinions on this matter.  I figured I'd get some good info here.

marijam, I'm looking forward to the transcript you post when you receive it.

The thing with Boeing is kind of ironic.  They evidently wanted a global market, which brings global competition and now they're upset because they didn't get a military contract because another company's product was deemed better.

Marijam,

Ethanol based on Brazilian sugar would be much more cost effective if not for sugar tariffs and engines could run on ethanol water mixtures instead of gasahol.  It isn't going to happen in the USand for lots more reasons than NAFTA.

Boeing bid using a smaller end-of-life airplane in the bid. NG used the Airbus because it fits the need much better. Boeing also did an end-run around the bid process. It was discovered and forced to a bid. I don't know a lot more than this except that we need more real facts to sort this out.

My info on refineries is that environmental restrictions are way over the top.

Corn/ethanol is not the fabulous fuel it was claimed to be.

I could be wrong on all three points but it seems there is lots of hollering going on over very uncertain and incomplete facts.

This may be of interest to some:

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

PS--As to the original post to open this thread--I see or sense and effort by the author to support NAFTA. I have read tens of articles and there is much disagreement among individuals as to the true effect. I had one person send me an early (1992??) article showing advantages in the fabric industry by having the material made in Mexico. A follow on article said that the maquiladoras (the fabric factories inMexico), were very soon shut down as the cost of labor was even cheaper in Asia.

PS:

 From an economic institute article: (2006)

"Despite its name, the primary purpose of the North American Free Trade Agreement (NAFTA) was not to facilitate trade among separate sovereign societies. Rather, it was to promote an integrated continental economy and establish the rules to govern it.

As a former foreign minister of Mexico once remarked, NAFTA was "an agreement for the rich and powerful in the United States, Mexico, and Canada, an agreement effectively excluding ordinary people in all three societies." It should, therefore, be no surprise that NAFTA rules protect the interests of large corporate investors while undercutting workers' rights, environmental protections, and democratic accountability. Hence, NAFTA should be seen not as a stand-alone treaty, but as part of a long-term campaign by the conservative business interests in all three countries to rip up their respective domestic social contract."