Economic Public Policy-Justin Haskins

Professor Jeffrey Braden of North Carolina State University on “No Child Left Behind”

John M. Melle makes very good arguments in favor of NAFTA. NAFTA was enacted in 1994.  Since then, our total trade with Canada and Mexico has doubled, Mexico’s exports have shifted to manufactured value-added goods, and American exported services has increased by nearly 75% since 1993 (pg. 321-322). Ultimately, the facts and figures show that there has been a positive economic improvement. Mexico has seen increases in their manufacturing jobs, Americans get cheaper products and are allowed to sell products for less in those countries, and both Canada and Mexico have received cheaper American services and goods that would have been more difficult to provide before the enactment of NAFTA.

So why is there any oppostion to the trade agreement at all? Sandra Polaski does a good job of summarizing the reasoning many opponents to NAFTA have. The major results opponents point out is the loss of agricultural jobs for Mexicans in Mexico and the loss of manufacturing jobs in the United States. Here is an interesting debate pre-NAFTA between candidate Ross Perot and Vice President Al Gore:

Here is another argument against NAFTA:

These arguments depict what John Melle’s statistics do not: that NAFTA has in fact caused a great deal of economic harm to our country in indirect ways. For instance, many believe NAFTA has put Mexican farmers out of business because American farms are able to produce food at a much lower cost through the use of subsidies and technology. Thousands of workers in Mexico that once worked on those farms have entered America illegally and legally in the search for work. If NAFTA was never signed and made into law, it’s logical to conclude that there may not be anywhere near as many illegal immigrants or the costs that are inherently associated with them. Further, although American service industries are expanding into Mexico and Canada, our manufacturing businesses are losing tremendous amounts of jobs and are forced to move into these countries, in particular Mexico.

I believe NAFTA works effectively but should also come with many other stipulations. I believe it is possible for us to benefit from free trade while also cutting off those negative characteristics of NAFTA. We need stronger borders, we need to do a better job of protecting American jobs, and we also need to be sure that our trucking industry is not dismantled in favor of Mexican truck drivers. In 2004, NAFTA created a U.S. trade surplus of 14.2 billion dollars. This is tremendous, but I believe our trade surplus could be and should be even higher.

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