How Did The North American Free Trade Agreement Affect The United States

According to a 2013 Jeff Faux article published by the Economic Policy Institute, California, Texas, Michigan and other high-concentration manufacturing states were most affected by NAFTA job losses. [97] According to a 2011 article by EPI economist Robert Scott, the trade agreement has “lost or supplanted” some 682,900 U.S. jobs. [98] Recent studies have agreed with congressional Research Service reports that NAFTA has little influence on manufacturing employment and automation, accounting for 87% of manufacturing job losses. [99] The North American Free Trade Agreement (NAFTA); in Spanish: Tratado de Libre Comercio de América del Norte, TLCAN; In French: North American Free Trade Agreement, ALNA) was an agreement signed by Canada, Mexico and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994 and replaced the 1988 Canada-U.S. Free Trade Agreement. [3] The NAFTA trading bloc was one of the largest trading blocs in the world, after the proceeds of the home. It is difficult to find a direct link between NAFTA and overall employment trends.

The Economic Policy Institute, partially funded by trade unions, estimated that in 2013, 682,900 net jobs were supplanted by the U.S. trade deficit with Mexico. In a 2015 report, the Congressional Research Service (CRS) said NAFTA “has not caused the huge job losses that critics fear.” On the other hand, it allowed that “in some sectors, trade-related effects may have been greater, particularly in sectors that have been more exposed to the removal of tariff and non-tariff barriers, such as textiles, clothing, automobiles and agriculture.” However, it is difficult to say whether NAFTA is directly responsible for this decline. The automotive industry is generally considered to be one of the most affected by the agreement. However, although the U.S. auto market was immediately open to Mexican competition, employment in this sector increased for years after nafta was launched, peaking at nearly 1.3 million in October 2000. That`s when jobs started to soar and losses became steeper with the financial crisis. At its lowest in June 2009, the U.S. auto industry employed only 623,000 people. While this figure has since risen to 948,000, it remains 27% below its pre-NAFTA level. NAFTA affects U.S. workers in four main directions.

First, it caused the loss of about 700,000 jobs when production was relocated to Mexico. Most of these losses were recorded in California, Texas, Michigan and other states where production is concentrated. Although there have been some job gains in the services and retail sector along the border, due to the increase in heavy-duty activity, these increases are small relative to losses and are in lower-paid occupations. The vast majority of workers who lost their jobs as a result of NAFTA have suffered a permanent shortfall. But while Mexico was “beating us economically” in the trade sense, imports were not the only ones responsible for the real growth in merchandise trade from 1993 to 2016, of 264%. Real exports to Mexico more than tripled during this period and increased by 213%; I read not so long ago that one of Milton Friedman`s favourite books on trade was Henry George`s book, “Protection or Free Trade,” written in the mid-1880s. George has made a very strong case for removing trade barriers that, in our modern world, still seem to be true. However, at the end of his book, he was smart enough to tell his readers that an important condition of free trade is the collection of social rents, which means the potential annual rental value of the land.

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