August 19, 2014
Why Am I Not Surprised…

…by this from Public Citizen? Because I am deeply versed in economics? Hardly. I never took so much as an introductory course in economics.

No, I was suspicious of NAFTA when Clinton first trotted it out twenty years ago not because I had a deep understanding of the free trade issue but because I was old enough by then, although only sixty, to have already learned the difference between shit and chocolate ice cream.

Cut out those pesky tariffs, Clinton told us, so we can move those unionized auto assembly jobs from Michigan to Mexico and everybody benefits. Mexican wages are bound to go up and if American workers wind up taking a little hit on wages their cars will become cheaper.

See? Easy. In our pursuit of the greatest good for the greatest number there is no need, for instance, to include in NAFTA a requirement to lower American tariffs in lockstep with the predictable increase in Mexican assembly line wages. The invisible hand of the market will take care of that. It wouldn’t (and didn’t), of course, the invisible hand being invisible due to its nonexistence.

Absent any such requirements, it was plain that Clinton wasn’t selling us chocolate ice cream. And sure enough:

On the eve of the North American Free Trade Agreement’s 20th anniversary, a new Public Citizen report shows that not only did promises made by proponents not materialize, but many results are exact ly the opposite. Such outcomes include a staggering $181 billion U.S. trade deficit with NAFTA partners Mexico and Canada, one million net U.S. jobs lost because of NAFTA, a doubling of immigration from Mexico, larger agricultural trade deficits with Mexico and Canada, and more than $360 million paid to corporations after “investor-state” tribunal attacks on, and rollbacks of, domestic public interest policies.

The study tracks the promises made by U.S. corporations like Chrysler and Caterpillar to create specific numbers of American jobs if NAFTA was approved, and reveals government data showing that instead, they fired U.S. workers and moved operations to Mexico. The data also show how post-NAFTA trade and investment trends have contributed to middle-class pay cuts, which in turn contributed to growing income inequality; how since NAFTA, U.S. trade deficit growth with Mexico and Canada has been 45 percent higher than with countries not party to a U.S. Free Trade Agreement, and how U.S. manufacturing and services exports to Canada and Mexico have grown at less than half the pre-NAFTA rate.

“NAFTA’s actual outcomes prove how damaging this type of agreement is for most people, that it should be renegotiated and why we cannot have any more such deals that include job-offshoring incentives, requirements we import food that doesn’t meet our safety standards or new rights for firms to get taxpayer compensation before foreign tribunals over laws they don’t like,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Given NAFTA’s record of damage, it is equal parts disgusting and infuriating that now President Barack Obama has joined the corporate Pinocchios who lied about NAFTA in recycling similar claims to try to sell the Trans-Pacific Partnership (TPP), which is NAFTA-on-steroids…”


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Posted by Jerome Doolittle at August 19, 2014 03:50 PM
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At the moment the USA are trying to do the same stunt on Europa with the TTIP free trade agreement. Of course our politicians are trying to sell it to us as the Golden Age coming. Sure, for them.

Posted by: Peter on August 20, 2014 1:18 PM

They know it's a scam. Free trade means the unfettered migration of capital, goods, services and labor. The labor component is always omitted because it would immediately and visibly destroy the middle class. Instead they bleed us to death in slow motion pointing to a host of irrelevances. Their form of free trade is a formula for serfdom in which unfettered capital flows can exploit balkanized captive labor in search of the lowest wage.

Posted by: Erich on August 21, 2014 11:12 PM
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