Essay about NAFTA

1048 Words5 Pages
On January 1st, 1994 the North American Free Trade Agreement, commonly referred to as NAFTA, went into effect after years of contentious battle and debate amongst those drafting it and viewing it from afar. In fact, it took three U.S. Presidents to finally complete the deal: Reagan, Bush Sr., and ultimately, Clinton. Those who opposed it warned of vanishing industries, skyrocketing unemployment, and of unfair consequences to those that were less educated. Ross Perot famously stated, “ giant sucking sound” of jobs leaving the United States would be heard. On the other hand, those in favor argued for that there would be an increase in global competitiveness, export revenue, and plenty of new jobs created. Twenty years later, it is important…show more content…
While some manufacturing jobs did leave to Mexico for lower wages, it is unreasonable to attribute that entire loss to NAFTA. In addition to offshoring, jobs have disappeared in the factory industry due to the recession and most importantly technological innovation that has replaced low skill workers (Wall Street Journal) . Most of the 682,000 jobs lost through 2010 came from the manufacturing sector due to Mexico’s low wages. These job losses are connected with the constant argument that NAFTA has created a trade deficit with Mexico and Canada. This is contended with the fact that one third of U.S. imports that create the deficit is crude oil and not agricultural or service imports. In fact the U.S. has a trade surplus of $14.5billion in manufacturing goods, $40 billion trade surplus in services, and a $2.6 billion trade surplus in agricultural products. (US Department of Agriculture) Wages in some manufacturing industries that stayed in the U.S. remained stagnant due to the fact the unions lost negotiating power under the threat the business could be moved to Mexico. However, a study by the U.S. Commerce Department signals that jobs tied to exports, which the U.S. has tripled, pay wages that are around 18% higher than those that are not tied to exports.
Global Competitiveness
Generally, NAFTA proved to have made several U.S. industries stronger

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