NAFTA's living up to its promise

Mon, 05/23/2011 - 23:01 — admin

Ratification of the North American Free Trade Agreement is one of the few occasions where President Clinton governed from the center, reaching out to the left and the right to build a winning coalition in both the House and Senate. NAFTA passed the House by 234-200, including 132 Republican votes and 102 Democratic votes, and in the Senate by 61-38.

The results of the first six months of NAFTA are now coming in, and the results are good, especially for the United States: U.S. companies are selling more high-value products such as automobiles, computers, semiconductors and other electronics, agricultural machinery and consumer goods such as cosmetics, household furniture, and sheets and
towels, and increased exports have generated more than 100,000 new jobs and more high-skill, high-wage jobs.

In addition, agreements to foster cooperation on labor and environmental issues are being implemented, and problems in the trade relationships (especially with Canada) are being solved within the NAFTA framework These findings come from a recent report issued by the U.S. Department of Commerce.

Other findings:

  • U.S. exports to North America (up 12%) are growing faster than U.S. exports to the rest of the world (up 5%). In fact, U.S. exports to Canada and Mexico are responsible for more than 52% of overall export growth.

  • U.S. exports to Mexico are booming -- up almost 17%, reaching $24.5 billion during the first six months of 1994. This amounts to an annualized total of $48.9 billion, up more than $7.3 billion from 1993 levels. Examples: In the first five months of 1994, the U.S. exported 12,380 passenger vehicles to Mexico, compared with 3,630 units the year before, and U.S. exports of beef are up 51% after NAFTA eliminated a 25% tariff on imports from the U.S. of these products. In fact, overall trade with Mexico is growing so rapidly that in both May and June Mexico displaced Japan as America's second largest trading partner, just behind Canada.

  • Trade with Canada is also up. Exports are up about 10%, to more than $55 billion during the same six months, and imports from Canada have also risen.

  • Our trade surplus with Mexico is increasing. If present trends continue, our surplus with Mexico will exceed $2.1 billion, greater than the $1.6 billion in 1993.

  • U.S. job dislocations have been minimal. While 100,000 new jobs have been created, only 4,820 employees have been certified for assistance under the Labor Department's NAFTA adjustment assistance program. So much for Ross Perot's "giant sucking sound."

    Just the other day, a civic leader I know said, "What's happened to NAFT~? We never hear about that anymore?" What's happened to NAFTA? It's working, just like it was supposed to -- increasing jobs and wealth on all sides of the border and providing the revenue and institutional framework for cleaning up the environment.

    • That's the way markets usually work The freer they are, the less we "hear about" them. Reason: Government is less involved as hundreds and thousands of men and women "do business" all by themselves, without government direction or involvement. That's why free trade agreements are so important. That's why NAFTA is working.

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