NAFTA Trade Plunges

Although there have been few bright spots in the economy recently, a report released Tuesday by the Bureau of Transportation Statistics found that surface trade with America’s North American Free Trade Agreement partners, Canada and Mexico, continues to plummet, providing a glimmer of hope for American manufacturers.   

The report found that overall, surface trade with Canada and Mexico for the month of April was down 33.1 percent from the previous April, falling to $49.7 billion.   

That represents the fourth consecutive month in which surface trade between the three nations declined greater than 27 percent.   

The report found that imports carried by trucks were down 27.6 percent year-over-year and exports fell 26.7 percent for the same period.   

In the first four months of this year alone, surface trade between the three nations is down 29.9 percent.  

Surface trade is defined primarily as trade occurring via truck, rail or pipeline.  Those three transportation methods account for 88 percent of all NAFTA-related trade.   

Since 1993, manufacturing employment in the U.S. has decreased from 16.8 million to 13.9 million in 2007, as the trade agreement put American workers in direct competition with Mexican workers. In the U.S. the average factory worker earns roughly $18 per hour. His Mexican counterpart, on the other hand, makes just $3 per hour on average. This has encouraged a “race to the bottom” in which American companies are frequently relocating production facilities across the border. Iconic American companies such as Coca Cola, Ford, RCA, General Motors and General Electric have all opened up assembly plants in Mexico. In fact, GE employs 30,000 Mexicans in 35 factories in the country.  

The U.S. had a small trade surplus with Mexico in 1993 before signing onto NAFTA. By 2007, 14 years after signing NAFTA, that surplus turned into a $91 billion deficit with Mexico. The combined deficit with Canada and Mexico together increased to $190 billion - an astounding 691 percent increase.  

In all, NAFTA has been an utter disaster that America would have been better off without. “Clearly, NAFTA has never delivered on its promises,” former U.S. Rep. Phil English has said of NAFTA. “We need to redesign NAFTA so it's not a race to the bottom.”  

Source The Trucker:

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