Free Trade Agreements Create Portals For Cheap Goods
Free trade agreements have been detrimental to our economy in the United States. This is partially because when we negotiate a free trade agreement, we don’t just open our borders to domestic manufacturers in one country, but rather that country becomes a portal for other countries to get their goods into the U.S. market.
A report by the Entrade Group cites Mexico as an increasingly popular destination for automotive, aerospace, electronics and medical devices, among other manufactured goods. One of the main reasons Mexico is so attractive to foreign manufacturers is the easy access provided to the U.S. through NAFTA. Manufacturers can set up shop in Mexico and ship their goods to the U.S. with no tariffs or duties, and the cost of transportation is reduced substantially from producing in countries like China. The report also mentions that while China’s wages are rising, wages in Mexico remain low, making it an even more attractive location for foreign manufacturers to exploit.
As a result of these cost advantages, hundreds of foreign manufacturers have set up operations in Mexico. By operating in Mexico, companies that may otherwise have had production costs similar to U.S. manufacturers can send inexpensively produced goods into the U.S. at no penalty— a trend that is decimating U.S. industries.
This use of other countries as a portal robs us of our ability to regulate the terms of trade. When we set out to negotiate with one country, we are setting the terms for any multinational corporation who wishes to set up shop in that country.
This also demonstrates that free trade is entered into not for the benefit of countries or small businesses, but rather for large, multinational corporations who can afford to exploit it. A family business is not going to see an increase in business from free trade, and most won’t be able to take advantage of cheap overseas labor. On the other hand, a large multinational corporation can move its operations wherever it sees fit.
This leaves Americans facing unprecedented competition from low wage countries while those at the top of big corporations reap the benefits.
Contact your representatives in Washington, let them know we need to get out of NAFTA immediately!