Nafta at 20by Representative Marcy Kaptur
Posted on 2014-01-09
KAPTUR. Mr. Speaker, last week marked the 20th anniversary of
NAFTA's going into effect. The North American Free Trade Agreement was
a hard-fought fight here in this Congress with a very close vote. In
1994, when it narrowly passed under a rule not allowing amendment,
called Fast Track, America was promised that NAFTA would be a great
jobs boon for our country and our economy. Exactly the reverse has
The NAFTA promises made have all been broken. First, on jobs: the administration at the time promised that NAFTA would initially create 200,000 new jobs. In reality, America has now lost, after 20 years, about 1 million jobs related to NAFTA's impact, and the old sucking sound actually happened. Our jobs were off-shored, sucked away. More than 680,000 American jobs have gone to Mexico alone. Yes, that great sucking sound continues to happen.
About 60 percent of the jobs lost, of the million jobs lost overall, were lost to Mexico in the manufacturing sector. These were middle class jobs that came from places like Cleveland, Toledo, Pittsburgh, Chicago and Buffalo, and the list goes on. They were good paying jobs in our country that had provided living wages, medical benefits, and employer contributions to retirement programs.
America was also promised that NAFTA would fuel dynamic trade in tearing down trade barriers and creating trade surpluses for our country which means that we actually would export more than we imported with jobs created as a result. Well, guess what, the trade barriers that NAFTA was supposed to tear down have actually created massive trade deficits--red ink--for our country.
If one looks back at the passage of NAFTA, prior to its passage, America actually had a trade surplus with Mexico. That is more U.S. exports out that Mexico imports in. But then with NAFTA's passage, we began to start really going deep into the hole of jobs being off- shored. And then with other trade agreements like free trade with communist China--which isn't free by any measure--we see that America's trade deficits have accumulated annually to historic levels never experienced by this society before.
The cost of this has been huge. Since NAFTA took effect, the annual U.S. trade deficit has increased by 5 times, a 500 percent increase from $98 billion in the red to $534 billion in the red. Each billion dollars of trade deficit accounts for anywhere between 5,000 and 10,000 lost jobs depending if it is in the retail sector or the industrial sector. Our cumulative trade deficit over the 20 years due to NAFTA-- get ready for this--is $1.5 trillion. If you want to understand why America has a job deficit and a budget deficit at the Federal level, it is because we have off-shored so many jobs through these trade agreements that are passed under the Fast Track procedure.
The year before NAFTA took effect, America actually had a $1.6 trillion trade surplus with Mexico; but every year after NAFTA took effect in 1995, that trade surplus with Mexico was turned into a $15.8 billion trade deficit in the first year. And every single year, it has simply gotten worse. By 2012, our trade deficit with Mexico ballooned to $61.6 billion. So every year, the hole got deeper. What a failure NAFTA is on the jobs front and on the trade front.
Finally, supporters of NAFTA claimed that NAFTA would open markets for American exports to Mexico. I will tell you one thing Ohio saw. Ohio saw pork production that used to happen in Ohio platformed down near Mexico City where environmental regulations, if they exist at all, are certainly not enforced. And we look at companies like Mr. Coffee that were sucked out of Cleveland and moved to Mexico. We saw suppliers in the automotive industry being relocated from our country to Mexico and Canada with U.S. middle class jobs just vaporized one factory, one farm at a time. It is as though the lights are being shut out from coast to coast in neighborhood after neighborhood.
Mr. Speaker, the legislation that I have introduced, H.R. 191, the NAFTA Accountability Act, basically says that these trade agreements have to work in America's interest, starting with NAFTA; and where these agreements have failed, adjustments must occur in order to stem the off-shoring of any jobs so we can begin re-creating middle class jobs in this country again. The NAFTA trade model must be replaced, fast track must be sidetracked, and jobs in America must be created again to rebuild our middle class.
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