Is NAFTA a disaster?

I read this cartoon today and it got me thinking. Do ordinary people really think NAFTA is a disaster, while CEO’s love it? Or are they like me, unaware of how NAFTA affects thems? If NAFTA is a disaster, how so?

Just wondering…

By the way, does anyone know of any good sites put up by people opposed to NAFTA?

Well, let’s see. There was that little matter of Ethyl Corporation being able to sue the government of Canada for having imposed an environmental regulation to the benefit of its citizens. Since this happened to ban a dangerous chemical produced by Ethyl, under the terms of NAFTA this was a restraint of trade and therefore a suable offence. A foreign corporation (Ethyl) was therefore able to force a democratically-elected government to cancel a law it had promulgated in protection of its citizens and its environment, not to mention pay Ethyl a hefty settlement. The upshot of this is that our government was forced to accept the use of a chemical which can’t even be legally used everywhere in the US.

Sorry again. That one was from me, not Hamish, as explained elsewhere.

All NAFTA is is an excuse for American Corporations to ship jobs to Mexico and exploit workers there. Here in Mississippi, a state which can ill afford to lose jobs, we’ve lost about 3000 or so I can easily recall. It’s devastating when a Small town with a population of 500 loses a factory which employs 150 people in that town. That’s happened 3 or 5 times already in the lifetime of NAFTA.

Basically, it’s for the enrichment of Corporations, cheaper labor means better bottom line.

Pat Buchanan and Ross Perot were two politicians who made a big deal about how NAFTA was going to be a disaster. Heard much from them recently?

Did NAFTA come up even once in the recent Presidential election?

Most people don’t think about NAFTA at all, which is a good indication that they don’t believe it’s ruining the country.

That’s just silly, Wumpus. A lot of people don’t think about how their cars, say, are destroying the environment. That doesn’t mean that they aren’t.

And, in fact, I heard from Pat Buchanan just last year. At Seattle. And whereas ol’ Pat is not exactly the kind of person I exactly want to have on my side, you have to figure when he thinks something’s important enough to get in a march with a buncha hippy secular-humanist tree-huggin’ homasecksuls over it, there’s something up.

Oh, fiddlesticks, I misspelled “homaseckshuls.” :smiley:

The job I held for twenty-five years was shipped overseas. Through NAFTA, my unemployment is extended eighteen months longer than regular unemployment. So who pays for the TRA (the continuation of unemployment)? Of this I am not sure.

Although it may end up being a good thing that my job is gone, right now it doesn’t feel that way. And I believe that the corporations ended up being the big winner (and me the little whiner).

  1. NAFTA is only good for corporations. No, for three reasons. First (downside), most businesses in the U.S. are small- to mid-sized. So, most jobs “lost” to NAFTA don’t respresent a net gain for the employer (i.e., they get the same job done cheaper in Mexico.) The employer himself has either gone out of business or cut back because he can’t compete anymore with Mexican companies.
    Second, Second (upside), U.S. companies that export to Canada or Mexico have gained a huge advantage, so they hire more people. Third, NAFTA has increased competition for U.S. companies, and companies hate competition. It cuts into their profits.

  2. Normal Americans don’t get any benefit. Bullshit. Anyone here remember cars from the 70’s? Detroit-made cars guzzled gas, were poorly made, and broke down ridiculously often. That’s because Detroit had no competition. The laws were modified to allow more imports, and the Japanese offered Americans fuel-efficient, well-made, and cheaper cars. The Japanese sure made out well, but so did the American consumer, who now had a choice, and opted in droves for the cars that were better for them. Consumers always benefit from competition.

3.It’s just an opportunity to exploit Mexican workers. This argument assumes that there were other jobs available to these Mexican workers. Obviously, there weren’t. So, an “exploitative” job is better for that Mexican worker than starvation. People in Mexico who didn’t have jobs before now have them.


I agree. Popular opinion is no way to gauge reality. Most people are so poorly informed they don’t even have an opinion on the things that really affect them, anyway.

This example is spurious, for a couple of reason. One, competition with Japan came about long before NAFTA, and has nothing to do with it. Two, the biggest objection many people have about NAFTA is that it results in jobs being shipped to other countries. This has nothing to do with the product a company offers, which stays the same. Three, there is no reason to think that NAFTA has actually increased competition. NAFTA concerns Canada and Mexico. Are there significantly more companies making and selling products in these countries than there were before NAFTA?

I should point out that free trade is one of the very few issues on which economists of almost all political persuations agree. It’s about the only time you’ll see someone like Robert Reich agreeing with Milton Friedman.

Think of free trade as a new technology - imagine if someone invented a black box that you could dump raw steel and grain into, and a nice shiny car came out the other end. This is no different than trading a bunch of a steel and grain to Japan in return for Japanese cars. Think of Japan as the ‘black box’. We put X amount in, and get a car back out. If the ‘X’ we put in is less than what it would cost us to make that car ourselves, then we have just improved our economy.

Note that if someone did invent that black box, it would displace a number of auto workers just as imports from Japan do. But healthy economies are constantly creating and destroying jobs. The invention of the motorcar destroyed numerous industries (blacksmiths, horse manure cleaners, stable owners, saddle manufacturers, you name it). And I’m sure that when the car came along there were plenty of people complaining about how it was going to destroy our way of life and our industry.

The invention of desktop publishing destroyed industries centered around mechanical type. Almost any new innovation displaces workers. Free trade is no different. But if on balance the economy is more efficient with free trade, then eventually our labor resources will shift into new areas where they can be more efficient.

  1. The Japanese car business I used was an example of the benefits of free trade. Of course it has nothing to do with NAFTA, and I never claimed it did.

2a. When faced with (free trade) competition, a company’s products either (a) get cheaper, or (b) get better, to justify their greater cost than the competitions. Thus, the consumer always benefit from free trade.
2b. When a country engages in free trade, its economy gets bigger, and therefore more jobs are created. This always happens. The problem of “jobs shipped to other countries” is a public image problem only - it’s easy to identify the jobs lost, but the (larger number) of jobs gained are spread more thinly and are harder to identify.

  1. Of course NAFTA increases competition. That is the whole point of free trade. Tariffs are wiped out or lessened, thus Mexican and Canadian companies’ products are cheaper. They can compete equally with U.S. companies on price.

As for the rest, read Sam Stone’s post.


Well, I’m no economist but I can throw in my 2 cents. The U.S. is currently enjoying the longest economic expansion in history, most of which has happened with NAFTA in effect. IMO longest expansion doesn’t equal disaster.

The expansion is predicated largely on inflationary stock valuation which bears no resemblance to real value, often causing stocks to increase whose companies have made no or even negative profits (, for example).

Moreover, it doesn’t matter if a nation’s GDP goes up for the simple reason that $10 000 in Bill Gates’ hands is worth as much for GDP purposes as $10 000 in the hands of ten workers. It does not reflect the quality of life of the society as a whole, which is why several nations with a lower GDP than the United States have a higher quality of life index.

If NAFTA is a disaster, what’s the alternative? If trade is bad, then we should not allow trade. I for one am sick about all those Canadians who have jobs. I propose that we close our borders, and stop all trade with Canada immediately.

Is the anti-NAFTA position: trade is bad, so the less trade the better? That would mean that the best level of trade was zero. Or is there some medium amount of trade that is better than the current level and also better than no trade? If that is true, what is the optimum level of trade, and how can we discover that level? Is it fixed? Does it vary? How much is too much?

My position: trade is good, so the more trade we have the better. It does not matter where a product is made. An American does not have a god-given right to a job if someone else does it cheaper and more efficiently. Protectionism has been shown over and over to be a disaster. Every nation benefits from trade.

Suppose that NAFTA means lots of jobs in Mexico. Is that a bad thing? Why is it better for an american to have a job than a mexican? Anyway, unemployment in the US is at the lowest it’s been in years. And if the argument is that Mexico is corrupt and has lax environmental laws, well the best way to improve that is through economic development in Mexico, which means, yes, jobs.

And I never hear about people complaining about Canadians taking their jobs. Are you opposed to free trade in general or just free trade with Mexico? Has the free trade zone of the European Union been good for Europe or bad for Europe? And if free trade benefits the rest of the world, how can America benefit by shutting our borders?

So I can tell those out of work garmet industry types, those magnatek workers, and others to just calm down, they can pick up jobs in other areas easy?

What are you on? Is it legal?

No, I’m sorry, I don’t think you’ve stuck your head outside the ivory tower. Forgive me if I’m being harsh, but some, if not most of these displaced workers can’t just “shift into new areas”. Little things, like job training. Might be too expensive for them. Things like no one else is coming in to take over that factory or garmet mill. Hey, if it’s cheaper to go to Mexico and offer them $1 an hour to make shirts whereas even in Mississippi you had to pay $10, why stay? All those benefits head south, and that leaves workers here high and dry.

There’s a HUGE difference between theory and reality. The reality is that some of these workers aren’t getting any of the benefits that NAFTA defenders claim are coming.

Lemur: Don’t be ridiculous. A critique of NAFTA is hardly a declaration of open revolt against trade.

You say “Does NAFTA mean ‘too much trade’?” NAFTA is not trade, nor is the problem with NAFTA that it permits too much trade. The problem with NAFTA is that it removes trade - an issue of severe national import - from national (i.e. democratic) regulation by giving companies the legal backing wherewith to reverse democratic policy. In other words, it is anti-democratic.

You say “An American does not have a god-given right to a job if someone else does it cheaper and more efficiently.” This is indeed true under the tenets of capitalism. The problem is that, to put it bluntly, a person from a middle-class society, who is paid a decent minimum wage and subject to decent working conditions, cannot compete with a worker from a third-world society, who is not.

If we have no way to enforce standards of production, that means that working conditions will decrease. That’s no good for society, and it has happened in Canada, Mexico, and the United States.

Besides, if you take all the jobs and move them to Mexico, who is supposed to buy the goods they produce? The working poor in Mexico, who can barely buy groceries? Or the unemployed in Canada and the US?

I’d like to hear a discussion of the Ethyl Corporation example given in matt_mcl nee Hamish’s first post in this thread.

Then again, I’d also like a pony for my birthday.

Last I looked there were still plenty of jobs in the US and Canada, despite NAFTA. I know some people are going to lose there jobs because of trade, just like they lose there jobs because of technological innovation. The REASON US unemployment is so low is that companies are allowed to fail when they no longer make economic sense.

And American workers CAN compete against third world workers. Just not in unskilled manufacturing or agricultural jobs. The biggest advantage we have over third world workers is that we have an educated work force and a working infrastructure.

Anti-trade policies put third world people out of work. They desperately need jobs there, how can you deny jobs to people who need work? Some towns in the US lose jobs, others gain jobs, but putting the brakes on trade is not the answer.

If the problem with NAFTA is not that it permits too much trade, can we stop talking about jobs? If you want to talk about environmental standards or sovreignity, fine, but then stop bringing up how bad NAFTA is for jobs. NAFTA is not bad for jobs, NAFTA creates jobs because trade creates jobs.

And if we take all the jobs and move them to Mexico, then Mexico will be rich and the US and Canada will be third world countries. Jobs flow back to the US and Canada then. Of course, it never reaches that point, what really happens is that wages in Mexico increase to parity with the US and Canada.

It’s the sad reality of progress and new (and preferred) ways of doing business. Some people will get shafted.

Apparently, bleeding hearts don’t prevail; cheaper and more effective ways of doing business do. Sam’s post is the perfect example: are you saying that we should toss out the computer and go back to metal type?

If you don’t change with your industry, you’re out of luck. Right now, I’m a wiz on the print side of things in the graphics industry; not so with web design. If I don’t constantly train and retrain to keep up with software and the latest innovations with the web, I’m screwed, and I’ll have no one to blame but me. It’s called being responsible.

As for companies leaving workers high and dry, companies close their doors all the time, bro. Layoffs are a fairly common thing. The only reason it seems bad is the idea that the jobs still exist, just not in your local area anymore, thanks to NAFTA.