Editor's note: This article was originally posted January 1, 2009.
On January 1, 2009 Americans mourned the fifteenth anniversary of the implementation of the deleterious “free trade” agreement that is the North American Free Trade Agreement, now it is just as important to look back and examine what an utter disaster it has been for the United States.
Proponents of NAFTA asserted that the agreement would create hundreds of thousands of jobs in America, Canada and Mexico. They promised to turn a small trade surplus with Mexico into a huge surplus that would benefit all three countries involved. Illegal immigration would be a thing of the past as jobs in Mexico would be plentiful and lucrative. Free traders talked openly of cheaper goods for American consumers with newfound purchasing power and unprecedented surges in exports to markets never before opened to U.S. products. Of course, none of that panned out and those free trade advocates failed to mention what the biggest U.S. export would be: good-paying American jobs.
“NAFTA is really less about trade than it is about investment,” former presidential candidate Ross Perot once said of NAFTA. “Its principal goal is to protect US companies and investors operating in Mexico. The text of the agreement is contained in two volumes covering more than 1,100 pages. Buried in the fine print are provisions that will give away American jobs and radically reduce the sovereignty of the US.”
Prior to the implementation of NAFTA, the U.S. held a small trade surplus with Mexico of approximately $10 million. By 2007, that surplus had turned into an astounding $91 billion trade deficit. With Canada and Mexico combined, the U.S. has taken a $24 billion trade deficit prior to NAFTA and turned it into a $190 billion deficit - a 691 percent increase.
NAFTA was also supposed to usher in a new age of prosperity among the American people as thousands upon thousands of good-paying jobs were to be created through the increase in trade surplus that never quite came to fruition. As you can imagine, just the opposite happened. Each and every year more and more jobs are outsourced to Mexico where labor is incredibly cheap and environmental concerns are a mere afterthought. The raft of jobs outsourced to Mexico forced American workers into direct competition with one another and drove down wages for all.
Now Americans are forced to compete, not only with one another, but also with Mexican workers who are willing to work for much less than the average American. In the U.S., the average factory worker makes roughly $18 per hour while his Mexican counterpart earns just $3 per hour. This has encouraged a “race to the bottom” in which American companies are frequently relocating production facilities across the border. Iconic American companies such as Coca Cola, Ford, RCA, General Motors, General Electric and Nokia have all opened up assembly plants in Mexico. In fact, GE employs 30,000 Mexicans in 35 factories in the country.
"NAFTA began it. We see nothing good about it," said Sue Levy, of United Auto Workers Region 1-D. "It's been used as a way to eliminate manufacturing jobs in the U.S. for low wages and no environmental protections.
This race to the bottom has had a devastating effect on America’s manufacturing base. Pre-NAFTA, the U.S. had 16.8 people employed in the manufacturing field. By 2007, that number was down to just 13.9 million. That accounts for over 20 percent of America’s manufacturing jobs over the past 14 years. Those good-paying manufacturing jobs have been replaced by low-paying service sector jobs with little or no benefits.
Another broken promise of NAFTA was the idea that the trade deal would be a boon for American farmers. Since NAFTA was implemented, 300,000 family farms in the U.S. have been put out of business. Overall, net farm incomes are down 13 percent.
The failure of NAFTA could not be evidenced more clearly than through the influx of illegal immigrants that have entered the U.S. since 1993. Illegal immigrants in the U.S. have increased to 12 million today from 3.9 million in 1993, accounting for an overall increase of over 300 percent.
Ross Perot warned of this problem when he said, “As manufacturing in northern Mexico expands, hundreds of thousands of Mexican workers will be drawn north. They will quickly find that wages in the Mexican maquiladora plants cannot compete with wages anywhere in the U.S. Out of economic necessity, many of these mobile workers will consider illegally immigrating into the U.S. In short, NAFTA has the potential to increase illegal immigration, not decrease it.”
In all, NAFTA has clearly been an utter disaster that America would have been better off without.
“Clearly, NAFTA has never delivered on its promises,” former U.S. Rep. Phil English said of NAFTA. “We need to redesign NAFTA so it's not a race to the bottom.”
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