Why is NAFTA good for the American worker?

[Postman]

Is NAFTA an attempt to bring a jobs program to the third world? Or is that what it has become?

Is NAFTA a vehicle for class warfare against the Labor Unions - the lowering of the standard of living in this country? - that companies can exploit the non-existant labor, environmental and safety standards of other countries at the expense of the American worker and to the benefit of wealthy factory owners?

How is it that NAFTA is legislation written by elected officials of this country that has had the effect of destroying good paying jobs that you could support a family on?

Why do the Dems point to the Clinton years as something to behold? Millions of Wal-Mart jobs are something to be proud of? Non-union, low-wage, low-benefit jobs replaced unionized, high-benefit, livable-wage jobs that you can't support a family on.

From where I'm sitting, that doesn't look like progress to me. Looks like the same old story...."owning class" warfare against the laborer.

[meegbear]

1. I have it up close and personal ...

my sister lost her job due to NAFTA. But I don't feel too bad for her. She has full tuition reimbursement for any type of schooling she wants to train for a new career and as long as she's taking one class anywhere, she can collect unemployment for 2 years!!

I was laid off last November and been cut off from unemployment checks in August. Cry me a river sis.

[ThirdWheelLegend]

3. Wow NAFTA RULES!

???

[IrateCitizen]

2. NAFTA was a policy written by and for transnational corporations

As such, that is who it is benefiting. It is NOT benefiting US workers. It is NOT benefiting Canadian workers. It is NOT benefiting Mexican workers.

The vast majority of commerce that has resulted from NAFTA has been by US companies setting up manufacturing and assembly facilities just across the border, in the maquiladora region of Mexico. What this means is that they can freely send parts across the border, have them assembled for a fraction of the cost in Mexico, and ship them back for sale in the US and Canada. The only real winner in this is corporate profits, although consumers can pay a slightly lower price. But considering the job loss involved, the consumer victory is really short-lived. And since technology transfer requirements are not permitted under NAFTA, Mexico can never gain the technological know-how that would help them to develop (like Japan and South Korea did).

With regards to agriculture, there is no ban on agricultural subsidies, which has resulted in the dumping of US corn in Mexico, throwing hundreds of thousands of Mexican farmers out of their livelihoods.

Finally, there are the 3 words "tantamount to expropriation" in the Chapter 11 of NAFTA, referred to as the "investor-state clause". What this has done is resulted in a "regulatory takings" philosophy that has effectively removed risk from the business investment landscape. Bill Moyers did an excellent piece on this a while back titled "Trading Democracy". The only word I can think of to describe it is hideous.

NAFTA was built on hypocritical arguments, which is now painfully apparent. While I support maintaining the WTO as a basic international framework, I think that NAFTA should be scrapped altogether. There is nothing wrong with a trade deal between the US and Canada, because they are on equal footing. But Mexico should be allowed (and encouraged) to follow the same patterns of selective protectionism under which the current economic powers developed.

[Fabio]

6. The "pro-labor"

rationale for NAFTA is based in the economic theory of comparative advantage.

Here's an explanation of that term:
http://www.wto.org/english/res_e/reser_e/cadv_e.htm

But basically, comparative advantage says that countries with the ability to produce cheap low tech goods should do that, while countries (like the US) with the ability to produce higher value added goods should do that. Why? Because net prices to consumers across the board will fall.

When NAFTA was passed, I'd say this was a pretty fair argument. It is grounded in economic reality. However, the pace of job flight, in conjunction with the explosive growth of low cost producer nations like China, has caused our job flight to be too painful.

It is important to remember that loosing low value added jobs to developing or lower cost countries was always part of the NAFTA plan. I think the pace of job flight has suprised everyone, as has Mexico's ability to producer higher value added goods. Nonetheless, IMHO, the real failure of the NAFTA policy is in our collective lack of efforts in America to define, pursue and educate the higher value added jobs for tomorrow.

[IrateCitizen]

8. NAFTA traps Mexico in a state of "permanent development"

"Comparative advantage" can be used as a means for development -- in fact, it is one of the driving forces behind the G-22 nations demanding an elimination of US and EU agricultural subsidies. By allowing developing nations' farmers to compete on the global market, they can then follow a path to development that is similar to what the industrialized powers did.

But under NAFTA, this "competitive advantage" is all a ruse for US and Canadian corporations to take advantage of cheap Mexican labor without the benefit to Mexico of technology transfers or the development of local industry. This, in turn, places downward pressure on US and Canadian wages, because there are more people competing for fewer jobs.

As for Samuelson's studies on free trade, I'll just say that they have been shown to be rather suspect because they remove just about every human element from the equation. That is, they are dry theories that dwell only in a theoretical world.

[Fabio]

9. Little confused.

"permenant development" -- i am assuming you mean always a developing country as opposed to always developing (ie growing) which would be a good thing.

Anyhow, my main comment would be that I think you are being a little too one sided with respect to the number of indigenous business's in Mexico -- which, in IMHO, is demeaning to Mexico. I've done business down there with several very large corporations -- Mabe, for one -- and they are definitely domestic operations.

[IrateCitizen]

10. Your assumption with regards to "permanent development" is right

As for the domestic Mexican businesses, my argument is that they are not the primary beneficiaries of NAFTA. The biggest winners are the US corporations who transplant their assembly and manufacturing operations across the border, all the in name of profit due to lower wages and little/no environmental regulation.

[WhoCountsTheVotes]

11. But the corporations get the comparative advantage, not the workers

Sure, a corporation can move a factory to a low wage country to get a comparative advantage over highly paid workers in the US - they get the advantage - now what do I get?

[theboss]

13. Easy

You get cheaper goods.

Granted, you may have lost income. And the costs of things like health care and property have not decreased. But things like tvs, computers, etc are cheaper because the production costs have been slashed.

[WhoCountsTheVotes]

14. only some goods are cheaper

sure cheaper TVs, but what about products with finite supply, like real estate? What about products with an inelastic demand, like perscription drugs?

"But things like tvs, computers, etc are cheaper because the production costs have been slashed."

If a corporation slashes production costs, they don't lower the price - they get a higher profit. Now why is it that products and capital can move across borders freely, but the workers who make the products can't? That's not free trade, that's just corporate rule.

[ProfessorGAC]

12. One Caution on That I/C

It is a fact (you can research it very easily) that almost 80% of all goods manufactured in the so-called maquiladora section across from Brownsville, Harlingen, and the like, are sold in Mexico and central America.

While some plants are true maquiladoros, and are making it there and shipping it there, the whole region has become highly industrialized and is the center of manufacturing for the good made in, then sold in Mexico.

I'm not defending the companies who do what you've described. But, there is a misconception that everyone who moves a plant across the Rio Grande is maquiladora. That's simply not true. Yes, they're multinationals, but this was an attempt to make goods for Mexico, in Mexico, by Mexicans. For the companies with that motivation, i applaud them.

The others, i will agree with everything else you've said.
The Professor

[IrateCitizen]

18. You may well be correct on this, Professor... BUT

I'll add one caveat to your closing thought...

Yes, they're multinationals, but this was an attempt to make goods for Mexico, in Mexico, by Mexicans. For the companies with that motivation, i applaud them.

The products may have been made for Mexico, in Mexico and by Mexicans; but the profits are still being siphoned back up to the North. And don't get to busy applauding these companies, because that was their entire goal from the get-go.

Without the kind of restrictions used by the likes of Japan and South Korea -- protectionism for fledgling industries, technology transfers, etc. -- Mexico is stuck in a trap from which they can never emerge.

[salin]

4. We are told that increased trade increases US jobs... HOWEVER

Our continued job losses, and the ever increasing Trade Deficit, suggests that we are buying MORE from things being made elsewhere (jobs) than other countries are buying things being made here. Seems that under these conditions the only jobs created/maintained are retail (selling the foreign goods) and perhaps import companies (brokering deals/transportation of goods/etc.)

It may sound good in theory (unfettered increased trade) but it hasn't played out as well in practice.

Those suggesting revisiting unfettered (magic market place) trade, in favor of "Fair Trade" (which, by the way through the eighties what is today called "free trade" in theory is what today called "fair trade" - the term "Free Trade" has been redefined by the magic market place Randian purists), seem to have a more pragmatic view - trade is good, but unfettered trade is not.

Those arguing that unfettered trade is good for developing countries seem not to notice that the cycle of development through industrialization has changed in the past 10-15 years. Once upon a time companies set up shop in a developing country (think: Hong Kong, Taiwan, South Korea, etc.)... over time labor forces pushed the pay rates up... over time the countries full standard of living went up. BUt that defeated the purpose of cheap labor (as the prices climbed).

Starting somewhere (eighties) many corporations changed the rules - offer the promise of jobs in new cheap labor market - but ONLY if the country agreed to : no labor conditions, waiver on any environmental/safety/wage conditions, etc. In these newer cheap labor markets - the 'magic market place' process of raising the standard of living stopped happening. Many corporations go in ONLY if they are able to ensure that the labor costs remain exceptionally low.

There are many examples of areas where the conditions for workers are not unlike the old "company" mining towns in the US. WHere the pay barely covers costs, and the employees have to pay some of the meager pay for services (sometimes for housing, or for required equipment) all done in a way that keeps the employees from being able to make enough money to save or donate to their families. Standards of living don't increase, and the workers conditions is closer to the old indentured servitude of the 18th century. Except that the employees are technically free (better than the old system), and that they don't eventually get out of the system with a trade that they can ply elsewhere and improve their lot (worse than the old system due to no ability for upward mobility).

[Lydia Leftcoast]

5. It doesn't

The whole "free" trade scam is set up completely for the convenience of multi-national corporations.

It's another example of the typical conservative/neoliberal "I'm only thinking of them" line. The public face of advocacy is "concern" for all the poor people in Mexico, but the private face is cutting jobs in the U.S. (so that the company's stock prices will rise) while still having a cheap labor pool available within reasonable shipping distance of U.S. markets.

Despite all the concern for poor Mexicans, the economic situation of Mexican workers has actually deteriorated since NAFTA.

It would have been much better for the Mexican government to fight poverty by encouraging domestic entrepreneurs, both large-scale and small-scale, who could create goods--and jobs with the potential for upward mobility--for the domestic market.

[MadHound]

7. I'm with you, NAFTA is ripping our country apart

Well paying manufacturing jobs are now fleeing over the border, H1-B visas are bringing in high tech workers who will work for much less. It is all forcing the American worker to compete with the rest of the world population for having the lowest wage. Yes, we temporarily benefit by getting cheap crap from China, but in the long run the whole world loses. Once all of the well paying jobs are gone, and the average working slob has no money, who are they going to sell their cheap crap to?

Rather than going about globalisation in this manner, what we need to do is raise the rest of the world up to our standards. Pay living wages for people all around the globe, with adequate benefits, no child labor, and reasonable work enviroment. Yes, we as American consumers might pay a little more(possibly as much as ten percent more) but the benefits to the US and the world would be enourmous.

This is why I just have to roll my eyes when the Clinton sychophants point to the prosperity of the Clinton years. Yeah right, how are we as a nation prosperous when the major gains in prosperity were for those in the financial sector, our standard of living dropped by 3.1 %, the number of working poor increased dramaticly and all of this wonderful job creation were mostly McJobs for minimum wage.

And yes, it has had the effect of destroying the unions and the labor movement(smart move Dems, destroying even more of your base) and is also a great vehicle for class warfare. The rich want to reduce all of us to the level of serfs so as to increase their power and influence. So much for Clinton and the Dems being the party of the working man. Sheesh, and people wonder why I've gone Green.

[TreasonousBastard]

15. There's a great misconception about...

NAFTA sucking jobs down south of the border.

Jobs were sucked south of the border long before NAFTA, and it hasn't made that much of a difference. The acceleration of outsourcing damn near everything overseas is pretty much the way things are being done, with or without trading blocs.

Before NAFTA, we were perfectly free to open factories or contract with the locals down there, and everything from shoes to car parts and chemicals was imported from Mexico. NAFTA was sold not so much as reducing or eliminating import duties on imported goods, but Mexico reducing its high tarriffs against US goods, and increasing our exports south of the border. The hope was that we both would benefit, not just Mexico.

It hasn't worked that way. As usual.

For a while after NAFTA, Mexican production leaped, but that wasn't so much NAFTA as US producers jumping on the bandwagon of cheap labor and lax environmental, labor, and other rules. NAFTA may have given them a little incentive, but they likely would have done it anyway, eventually.

Now, everyone's jumping on the China bandwagon, and even without NAFTA, not a whole lot is going to be done to stem the flow of jobs.

Mexico itself is being hit with a double whammy we know so well. They are losing production jobs to China, and they have immigrants from Central America crossing their southern borders looking for work.

We are up to our asses in alligators, and there is no clear way out of the swamp.

[PATRICK]

16. NAFTA vs. Isolationism

Unfortunately the world and its peoples lose with both. In fact some of the same evils sneak by because the real problem is with neither viewpoint but the free rein given to corporate robber barons.

NAFTA was a a bill of goods, but it did have the point of leveling the inequities of the world- eventually- IF the regulation was down in the social interest fairly for everyone. That means growing environmental and democratic civil governments aborad, unions protecting their position by growing unions abroad. In other words, REALLY leveling the field as much as possible, not dumping democracy overboard as foreign jobs shipped overseas become Trojan horses for corporate conquerors while back home WE become a permanently degraded third world population(Note our bellwheather poverty rate and infant mortality rate). Only OUR Imperialists will find a way to construct an American Ponzi pyramid out of the mess.

The dream of Globalists and their worker paradise(free of unions and civil governments)was childish and clubbish in not facing up to the sources of the worst historic tagedies throughout human history. Rapacity for power, greed, elitism and hatred. Among their own. Among the drivers and suppliers of the world economic shift. The Grand Illusion.

[HFishbine]

17. Nutshell

Good for American consumers, bad for American manufacturing workers.

[diamondsoul]

19. Good for consumers?

I'm not even convinced of that assertion! Electronic devices are onf of the manufacturing specialities that are increasingly moving out of the US. Ok so fine, we get a cheaper sticker price, but how does that equate to good when the product fails after 6 weeks of normal use? Now I have to buy a new one every 6 weeks if I really want that product, and why? Because most warranties run out at about that time on small home appliances!

My most reliable microwaves to date have all been manufactured and assembled in the USA, and say as much. Meanwhile I cannot keep a cordless phone operational in my home for more than 6 weeks time, period! I don't throw them, slam them or in any way mistreat them, yet they all just QUIT WORKING after about 6 weeks. NONE are manufactured and assembled in the USA.(those that I've been able to afford anyway) Lower sticker price is fine and dandy as long as I don't have to replace the product within a much shorter time span, and that's how things have worked out.

From here on out, I'll pay the extra cost to buy electronics manufactured and assembled in the US with a Union bug on them. (Thanks so MUCH Dennis Kucinich!) Why? Because quality does not come from low-cost goods.

Here's another little indicator, I bought two ceramic mugs from the Kucinich campaign store, made in America by Union workers. Those mugs are going to LAST! They are thick, sturdy and pleasant to use. I wash my dishes by hand so I have no worries of the logo washing off, nor the mug chipping or otherwise being rendered un-usable. I LOVE my Kucinich mug, and I love the company and the Union responsible for making them!