The North American Free Trade Agreement (NAFTA) in Perspective
Few are aware that NAFTA (North American Free Trade Agreement) has rendered us uncompetitive in the world economy, has destroyed our industrial base, caused us to outsource most of our production, and killed most of our manufacturing jobs.
Imagine if Congress decided that a single state, such as California or Michigan, was in desperate need of jobs and investment and made dramatic changes to boost that state’s economy.
Imagine Congress did the following for only one American state:
- Dropped the minimum wage to $3 per hour
- Exempted them from child labor laws
- Expanded the work week
- Reduced health and work place safety laws
- Banned unions
- Reduced protection for the environment
On top of this, the companies residing in this state would still have free duty-free access to all of the others states. In other words, companies in this state could produce at a fraction of the cost of other states, yet would be able to sell directly to all other 49 states and compete at no additional cost.
What would you think of that? You and the other 49 states might agree that this was absolutely ridiculous!
But this is exactly what is happening right now with NAFTA (North American Free Trade Agreement). Not with California or Michigan, but with Mexico and Canada from the time NAFTA was passed. Why would any company manufacture in the U.S. now when it can produce next-door in Mexico with all these unfair advantages?
When NAFTA was passed, many people feared the worst. The results have indeed been disastrous:
- The trade deficit with Mexico has exploded
- Mexican wages remain nearly as low as they were prior to NAFTA and are still a small fraction of our average wages
- Wealth and power has not filtered to the people. Most of Mexico is still controlled by less than 100 corporations in Mexico
- Many of our other trading partners have relocated facilities to Mexico to circumvent other trade agreements with the us
- American manufacturing has lost 3 Million jobs in the past 10 years as U.S. companies have also moved to Mexico for lower wages and lax regulations
On the basis of the one-sided disastrous results over more than two decades, whoever advocated NAFTA seems to be either grossly negligent of their duty of representing their constituents or is simply working contrary to the best interest of this country.
The Truth About the North American Free Trade Agreement (NAFTA)
American workers are now forced to compete directly with Mexican workers who, on average, make just $3 per hour. Their American counterparts make $18 per hour. Why would any manufacturer want to produce here in America and pay $18-20 per hour when the same product can be produced right across the border in Mexico for just $3 per hour and then shipped back to the U.S. duty and restriction free?
We had a small trade surplus with Mexico in 1993 before signing onto NAFTA. By 2007, 14 years after signing NAFTA, that surplus turned into a $91 billion deficit with Mexico. The combined deficit with Canada and Mexico together increased to $190 billion – an astounding 691 percent increase.
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.
Since NAFTA was implemented, 300,000 American family farms have been put out of business. Overall, net farm incomes are down 13 percent.
Obviously NAFTA has not been very beneficial to the us. In all reality, the trade pact has been an abject failure.
The cruel reality of NAFTA is that it does not benefit the American worker. In fact, it encourages our jobs to leave the country in pursuit of lower wage rates, non-existent environmental standards and trade without restrictions.
The nation’s continued participation in NAFTA results in fewer manufacturing jobs and an influx of foreign produced goods. Our citizens lose good jobs while Mexico reaps the benefits of this trade bloc.