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The North American Free Trade Agreement (NAFTA) in Perspective

JUNE 13, 2016   PATRICK KELLEN

clip_image002Few are aware that NAFTA (North American Free Trade Agreement) has rendered us uncompetitive in the world economy, has destroyed our industrial base, caused us to outsource most of our production, and killed most of our manufacturing jobs.

Imagine if Congress decided that a single state, such as California or Michigan, was in desperate need of jobs and investment and made dramatic changes to boost that state’s economy.

Imagine Congress did the following for only one American state:

  • Dropped the minimum wage to $3 per hour
  • Exempted them from child labor laws
  • Expanded the work week
  • Reduced health and work place safety laws
  • Banned unions
  • Reduced protection for the environment

On top of this, the companies residing in this state would still have free duty-free access to all of the others states. In other words, companies in this state could produce at a fraction of the cost of other states, yet would be able to sell directly to all other 49 states and compete at no additional cost.

What would you think of that? You and the other 49 states might agree that this was absolutely ridiculous!

But this is exactly what is happening right now with NAFTA (North American Free Trade Agreement). Not with California or Michigan, but with Mexico and Canada from the time NAFTA was passed. Why would any company manufacture in the U.S. now when it can produce next-door in Mexico with all these unfair advantages?

When NAFTA was passed, many people feared the worst. The results have indeed been disastrous:

  • The trade deficit with Mexico has exploded
  • Mexican wages remain nearly as low as they were prior to NAFTA and are still a small fraction of our average wages
  • Wealth and power has not filtered to the people. Most of Mexico is still controlled by less than 100 corporations in Mexico
  • Many of our other trading partners have relocated facilities to Mexico to circumvent other trade agreements with the us
  • American manufacturing has lost 3 Million jobs in the past 10 years as U.S. companies have also moved to Mexico for lower wages and lax regulations

On the basis of the one-sided disastrous results over more than two decades, whoever advocated NAFTA seems to be either grossly negligent of their duty of representing their constituents or is simply working contrary to the best interest of this country.

Source: The North American Free Trade Agreement (NAFTA) in Perspective