NAFTA’s 20th birthday — cause to celebrate?

Kate Davidson Jan 1, 2013
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NAFTA’s 20th birthday — cause to celebrate?

Kate Davidson Jan 1, 2013
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The North American Free Trade Agreement came into force twenty years ago, on January 1, 1994. NAFTA created the world’s largest free trade zone and a lot of controversy. President Clinton promised more jobs, while folks like Ross Perot warned NAFTA would create a giant sucking sound as jobs went south.

For Shannon O’Neil, the NAFTA verdict is clear. “It has been a net win for all three of these countries,” she says. 

O’Neil is senior fellow for Latin America Studies at the Council on Foreign Relations. She says trade between Mexico, Canada, and the US has basically quadrupled. “It’s over a trillion dollars worth of goods that goes back and forth across the borders,” she says. The Office of the US Trade Representative says the US had $918 billion in total goods trade with Canada and Mexico in 2010, running a goods trade deficit.

Shannon O’Neil says while US job gains have been modest, consumers have benefitted. She says those TVs we purchase at Best Buy are cheaper because of NAFTA.

Rob Scott is director of Trade and Manufacturing Policy Research at the Economic Policy Institute. By his calculation, the US has lost jobs to Mexico. He says Mexican workers have suffered too.“Mexico was hit with a flood of cheap subsidized corn imports from the United States. And that drove millions of peasant farmers off of the land and into the cities,” he says. Scott says many migrated to the US, suppressing wages for workers at the bottom of the labor market here.

NAFTA is twenty years old, but not yet history. We’ll likely hear more about it as the Obama Administration pushes two new trade treaties this year.

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