If you listen to Senators Obama and Clinton, mostly Obama, you would think that NAFTA was a pact with the devil. Supposedly it is the ruination of the manufacturing sector in the United States. Could this wisdom offered by Senator Obama and the claimed experience of Senator Clinton be flat out wrong? They must know what they are talking about – at least they say they do. Remember Senator Obama has said something to the point that experience is not necessarily a good thing as President, and that wisdom in a President is more important.
NAFTA is the North American Free Trade Agreement and the participants are the United States, Canada, and Mexico. It was an agreement to eliminate tariffs (taxes on imports) on goods traded between these nations.
According to Senator Obama, this agreement has been eliminating manufacturing jobs in the United States. He wants to revisit it and wants any agreement to have requirements on standards for foreign workers to help keep the United States in balance on trade. If this agreement, NAFTA, is the cause of the manufacturing job loss then the jobs must be going to the manufacturing juggernauts, Canada or Mexico, since the agreement participants are only the three North American countries. Well, Canada is not fairing well with it manufacturing industry. The following excerpt is taken from Statistics Canada.
http://www41.statcan.ca/2007/4005/ceb4005_000_e.htm
Manufacturing
Nearly two million Canadians work in manufacturing. They transform raw materials into the finished products that line our store shelves and are exported for consumers around the world. Traditionally one of Canada’s strongest industries, manufacturing is still a cornerstone of hundreds of communities large and small.
But our economy has been changing quickly. In the face of lower-priced global competition, a stronger Canadian dollar, and the robust growth of the services sector, the manufacturing sector is in a period of decline.
If it is not Canada stealing our jobs, then it must our neighbor to the south. In an excerpt of a report below taken from a report in 2006 by the Federal Reserve Bank of Dallas: http://www.dallasfed.org/research/swe/2004/swe0406c.html
“Over the past 20 years, Mexico has transformed itself into a manufacturing-for-export nation. Exports now represent 30 percent of its GDP, up from 10 percent 20 years ago. The vast majority of Mexico’s exports are manufactured goods, and almost 90 percent of them are shipped to the United States.
But these days Mexico appears to be losing ground in U.S. markets. Its share of U.S. imports peaked at 11.5 percent in 2001 and has slipped since then. While Mexico has tripled its manufacturing in the last 20 years, its exports to the United States represent only about 11% of our imports…”
Yes, Mexico is formidable in its exports of manufactured goods, especially machinery. Is Mexico taking our manufacturing jobs? Yes, probably some of them. Is it the cause of the enormous drain on our manufacturing industries? No, not at Mexico’s 11%. Does Barack Obama know what he is talking about when he wants to insert protections into any trade agreements that protect us by providing requirements on foreign workers’ pay and work environments? Sounds great doesn’t it! How does he plan to enforce these rules in a foreign country? It is little naive for Senator Obama to think that in a world of fierce worldwide competitive trade other countries in desperate need of trade will honor the letter of the agreement and play nice. Will the honor system work? I doubt it!
We need to focus on how we support manufacturing in this country and we need to understand that we are in the worldwide trade arena and do whatever we can to make our manufacturing export industries as competitive as possible. He and Senator Clinton should be talking about this new approach and stop bashing an agreement, which they claim is the cause of the loss in manufacturing jobs, so they can win a primary. The most outspoken critic is Senator Obama. If he does not know any better, then he may not be the right person to put into the Oval Office.
