Posted on 09/02/2016 5:10:40 AM PDT by expat_panama
“NAFTA is the worst trade agreement we’ve ever made in our history — the worst!”
— Donald Trump
One of Donald Trump’s signature campaign slogans has been “We will build a wall and make Mexico pay for it.”
Trump has attracted a lot of voters — though probably not enough to win the election in November — by attacking hallmarks of American success, the principles of free trade and relatively open borders. We are often characterized as a melting pot, a nation of immigrants who are all seeking the American dream.
Trump wants to change that and build walls around America, rather than bridges. He threatens to impose a 35% tariff on all Mexican goods to pay for the new border wall.
Is Trump right? A couple of years ago, before Trump announced his candidacy, a report on “NAFTA, 20 Years Later,” came out from the Wharton School of Business — the school that Trump attended as a graduate student in 1968, where he majored in economics!
You can read this report here: http://knowledge.wharton.upenn.edu/article/nafta-20-years-later-benefits-outweigh-costs/
Free trade is one of the tried-and-true principles of economics, and 98% of economists are in favor of it because they know it increases trade, employment and consumer choice on a net balance.
Indeed, despite the would-be Cassandras like Ross Perot who predicted that NAFTA — the free trade agreement between the United States, Canada and Mexico that went into effect in 1994 — would prove detrimental, NAFTA has overall been a YUGE success.
Yes, there have been U.S. job losses as a result of NAFTA, but there have also been plenty of job gains. In the Wharton report, management professor Mauro Guillen concludes, “a lot of jobs were created in the U.S. that wouldn’t be there without the Mexico trade. I’m not just talking about Texas or California or Arizona…. Many of the products made in Mexico are designed in the United States. So there are a lot of jobs created here.” Walter Kemmsies, chief economist at Moffatt & Nichol, an international infrastructure consultancy, notes that close to 40% of what the U.S. imports from Mexico is derived from U.S. sources. He estimates that, 20 years ago, that percentage was less than 5%, and the growth during that time is “a symbol of the success of NAFTA,”
Granted, United States now has a trade deficit with Mexico, but as the Wharton report states, “the U.S. runs a trade deficit with 90% of the countries in the world. So Mexico is not unique. In fact, the U.S. also runs a deficit with Canada, and that’s mostly because of oil and gas.”
The auto sector has seen the most dramatic change. According to the Wharton report, Japan exported almost twice as many cars to the United States as did Mexico in 2008. Now, however, Mexico exports close to two million vehicles to the United States annually, surpassing Japan and Canada. By 2020, 25% of all North American vehicle production will take place in Mexico, compared to 10% in Canada and 65% in the United States.
The Wharton report argues that NAFTA has, on balance, been a good thing for the U.S. economy and U.S. corporations, “The sucking sound that Ross Perot predicted did not occur; many jobs were created in Canada and Mexico, and [the resulting] economic activity created a somewhat seamless supply chain — a North American supply chain that allowed North American auto companies to be more profitable and more competitive.”
BS, BS, BS.
Putting the US on even keel with nations who should have carrots to achieve or other is good only for the elites and GOPe. It’s not protectionism, it is making sure the playing field is EQUAL for all, not just for the elites, GOPe and the marxist dictators.
We run a deficient with a country which has lived off American Dollars for 200 years.
I guess if one considers that everything in the store can be a “loss leader”, then NAFTA is perfect....
I lived in the Houston area when NAFTA was passed. The business men at that time were saying that they were being harmed soon after it passed.
A lot of people say that; I'll never forget how one guy here told me "I don't care what Trump says, the system's broke and Trump's the hand grenade that can end it.'.
$200,000 or even $250,000 MILLION dollars seems like $250 billion dollars to me.. Is this right?
In 2015, Mexico’s GDP was 1.14 Trillion. This graph? is saying over a quarter of that entire GDP was outflow to the US for our goods? I am skeptical.
After reading this article my IQ dropped 10 points.
NAFTA has been great for the USA. Trump doesn’t understand trade.
Globalist BS
Which explains why Mexico is an economic powerhouse, and we are not. Oh, wait a minute.
“Trump has attracted a lot of voters — though probably not enough to win the election in November — by attacking hallmarks of American success, the principles of free trade and relatively open borders. We are often characterized as a melting pot.”
Just another NeverTrump quisling braying like a jackass in hopes of electing Hillary Clinton.
Why do you care about an equal playing field? You can’t have an equal playing field because every country is different. Free trade is good for economies and anybody who is educated knows it. This is why Hillary does well with college graduates. Most recognize she is terrible on every issue, but give her the benefit of the doubt because she is for free trade.
A real free-trade agreement is a one-page document.
A 10,000 page free-trade agreement is 10,000 pages of exceptions to free trade.
And only sociopaths/psychopaths would refuse to acknowledge the difference between legal/illegal immigration/invasion and legal/illegal immigrants/invaders.
The auto industry went bankrupt and was bailed out by stealing money from the tax payers.
Every tax payer should have received stocks from big auto.
The lack of issuing stocks is what makes it theft.
The sad part is, not only is the media not trusty worthy, they are also stupid. And the problem with stupidity is not being smart enough to know stupid when the stupid sees stupid.
It's like having the village idiot being the town crier.
There you go.....
That sets the standard then, doesn't it?
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