That giant sucking sound that Perot spoke of...
I honestly don't know if NAFTA was good or bad for the US. I opposed it, in part because I hate the newspeak - "free trade" is not free trade in that instance, but "managed trade". This article tells how it was bad
, and how Clinton, in "forgetting" NAFTA, might be making a mistake.
In 1993, the Clinton White House and an army of corporate lobbyists were selling NAFTA as a way to aid Mexican and American workers. Perot, on the other hand, was predicting that because the deal included no basic labor standards, it would preserve a huge “wage differential between the United States and Mexico” that would result in “the giant sucking sound” of American jobs heading south of the border. Corporations, he said, would “close the factories in the U.S. [and] move the factories to Mexico [to] take advantage of the cheap labor.”
The historical record is clear. The Carnegie Endowment for International Peace reports, “Real wages for most Mexicans today are lower than when NAFTA took effect.” Post-NAFTA, companies looking to exploit those low wages relocated factories to Mexico. According to the Economic Policy Institute, the net effect of NAFTA was the elimination of 1 million American jobs.
Multiple, talented, engineer friends of mine eventually lost their jobs to Mexico. Others moved to Texas to be closer to the action. However, many, many engineers that I know also lost jobs to India and Russia, and even more just lost their jobs after 2000, due to the economy. Blaming another country for their troubles, and mine, strikes me as possibly statistically insignificant, but I don't know. What kinds of jobs moved? What kind of jobs were created in the US? Who profited? Who didn't? What industries grew? What ones consolidated or shrank?
I do have an opinion on one thing - that once manufacturing moves overseas, all other sorts of jobs eventually follow - we move basic labor, then engineering, then management, ultimately leaving just sales and marketing in the US. Basic R&D suffers due to the disconnected distances involved between people on the shop floor and in the ivory towers, and ultimately innovation slows down, at least for a time.
I'm now looking for statistics that show successes for NAFTA just to get a balanced viewpoint.
I started worrying about CAFTA after it was too late, but I opposed Costa Rica ratifying CAFTA for different reasons. 1) It required that the signing countries buy into America's draconian IP laws. I, personally, don't want to live under those laws, anymore, they make my life as a programmer and musician too difficult. 2) Speaking scientifically, it would have been useful for a country in that area to not be a signatory, as a control in the experiment. And 3) (most important) - it was the first time a trade pact like that had ever gone to a popular vote.
I dislike extra-governmental organizations like the WTO, etc, because of their secrecy and lack of transparency. I'd like to see the machinations of those orgs more deeply exposed.
Up until the last weeks of the referendum in Costa Rica (after the pro-CAFTA forces had been exposed as planning to use illegal means), Costa Rican approval of CAFTA was running at well below 40%. Somehow, by voting day, it passed (barely).
Ron Paul, so far as I know, is the only candidate running that remains deeply skeptical of the effects of managed trade agreements like CAFTA and NAFTA. I have to think more on this and hope that perhaps my readers can supply more data.
Labels: cafta, nafta, Ron Paul