The United States economy has been ravaged by crisis during the past year. The housing market collapsed; bringing the credit, financial and banking industries down with it. These problems are dire, but they have also been relatively short-lived. The biggest problem in the U.S. economy is the imbalance and instability produced by “free trade” under NAFTA and the WTO. Estimates show that NAFTA has cost the U.S. a minimum of 525,000 manufacturing jobs, according to BusinessWeek.
Everyone knows that the U.S. has lost thousands of productive manufacturing jobs to Mexico, but the problem goes much deeper than the sheer number of jobs lost. NAFTA helped ingrain the injurious precedent of outsourcing into the mind-set of American corporations. Companies like General Motors and Ford have survived, but their former employees are out of work. Ford makes thousands of vehicles every year in its multi-million dollar facilities in Mexico. GM likewise has major facilities in Canada and Mexico where labor is cheaper than in the U.S.
In their never ending search for bottom line profits these companies have sold their employees out. Now, under the auspices of liberal “free trade,” the U.S. is losing more jobs to places outside of Canada and Mexico. While much of our heavy industry has been outsourced locally, many high paying technology and service jobs have been sent overseas to places like China and India.
Pascal Lamy, President of the WTO, argues that all trade is beneficial. His clouded world-view ignores the very real problems caused by unfettered and unregulated trade. Trade definitely benefits parties on both sides, but the groups that benefit are too small to help the overall economy. NAFTA has allowed dying industrial giants like GM and Ford to stay alive while providing thousands of jobs to Canadians and Mexicans. Executives keep their jobs and maintain their ballooning salaries; Mexicans and Canadians get the opportunity to work in the manufacturing sector. Unfortunately, the benefits of NAFTA ignore American workers who are replaced by foreign labor and lack a cushion to fall back on.
Our current stance on “free trade” has to be amended in a way that guarantees benefits to the American people as a whole, rather than the executives at the top and the foreign laborers at the bottom. The United States should pursue any means – including tariffs, economic protection and the potential removal of trade agreements – to shore up its economy and protect its workers. We have ignored the problem for too long and it has grown well beyond a crisis. This problem has become a catastrophe.
Source BusinessWeek:
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The most conservative estimates indicate that NAFTA has cost the U.S. a minimum of 525,000 manufacturing jobs, and some estimates range as high as 766,030. These jobs have not been replaced by other manufacturing opportunities. In general, those who have lost employment as a result of NAFTA, as well as the roughly 3 million workers who have lost manufacturing jobs during the post-1994 period, have "migrated" into lower-wage employment in the service sector.
… What the NAFTA experience really points to is that steps such as NAFTA, allegedly taken to "grow the economy," increasingly benefit a smaller and smaller segment of those societies, including the U.S., that follow a "neo-liberal economic model." In comparison, little has been gained by those who have lost their jobs (or the communities that shared the benefits of their employment) because of NAFTA. |
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