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NAFTA and CAFTA in Perspective

Published 09/15/05 Thomas Heffner - Print Article
E-mail - editor@economyincisis.org

Imagine if Congress decided that a single state in the US, such as California, was in desperate needs of jobs and investment and made dramatic changes to boost that state's economy.

Imagine Congress did the following for only 1 US state:

  • Drop the minimum wage to $0.53/hour
  • Exempt them from child labor laws
  • Expand the work week
  • Reduce protection for health, safety, retirement and the environment

On top of this, the companies residing in California still have free duty-free access to all of the others states. In other words, California companies could produce at a fraction of the cost of other states yet would be able to sell directly into all other 49 US states and compete at no additional cost.

What would you think of that? You and the other 49 states might agree that this was absolutely ridiculous!

But this is exactly what is happening right now with NAFTA (North American Free Trade Agreement). Not with California, but with Mexico at the time NAFTA was passed.

When NAFTA was passed, many people thought the same way you probably do now. The results have indeed been disastrous:

  • The trade deficit with Mexico is now one of the largest of US trading partners (5th largest deficit trading partner)
  • Mexican wages remain as low as they were prior to NAFTA and are still a small fraction of US wages
  • Wealth and power has not filtered to the people. Most of the Mexico is still controlled by less than 100 corporations in Mexico
  • Many of our other trading partners have relocated facilities to Mexico to circumvent other trade agreements with the US
  • US manufacturing has lost 3 Million jobs in the past 10 years

Now CAFTA (Central American Free Trade Agreement) has been signed by President Bush and has been passed by Congress by one vote.

On the basis of the one-sided disastrous factual results over the past 10 years, whoever advocated CAFTA and the continuing participation in NAFTA seems to be either grossly negligent as an American or is simply working on behalf of another country.

The right action is to stop forcing our companies to have to outsource in order to compete, not to try and force open other markets for our exporters - we are making nothing to export! It is all made in other countries by foreign corporations!

Click here to contact your Representative in Congress.

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