Throughout the
years, the United States has been involved in a number of trade agreements with
nations around the world, based on different necessities and different
opportunities. Some of these trade agreements, including the North American
Free Trade Agreement with Canada and Mexico, involve the use of free trade
among states. This North American Free Trade Agreement, NAFTA, and its free
trade system is an arrangement that has had many positives and negatives for
the US economy and social system. The basis of this trade agreement is centered
on a trade bloc between the three countries, removing tariffs and blocks,
allowing for economic, environmental and agricultural interactions.[1]
Though good and bad, in my opinion, the negatives that come out of this free
trade agreement, and free trade agreements in general, for the United States
far outweigh the positives of such treaties.
First
off, I believe it is important to make it clear that the North American Free
Trade Agreement has certainly had its successes, and has brought in a good
amount of profit for the United States. Specifically, the agreement has sparked
exports, and has led to a 45% increase in exports to both Mexico and Canada in
the year 2011, which is an astronomical number.[2]
Furthermore, there is speculation
that NAFTA has influenced as much as .5% increases in the US economic output
yearly, leading to the assumption that NAFTA has improved the American economy.
Another statistic that I think is important in describing economic success of
this agreement is that the combined output of this agreement is over 17
trillion USD.[3] Just to make
it easier to understand how much that is, compare it to the US national debt.
That 17 trillion dollar number is nearly identical to the amount the United
States owes around the world. It is without question that free trade
agreements, specifically involving Mexico and Canada, have netted certain
positive economic benefits for the United States. However, in my opinion, the
negative affects on US and International Businesses, and the various problems
that these free trade agreements create are not worth it. NAFTA and other free
trade agreements should not be so prevalent, as they cause many significant
issues.
One
of the major cons of certain free trade agreements, including NAFTA, is
centered on the idea of domestic job opportunity, specifically in the
manufacturing sector of the economy. One of the basic principles of NAFTA
allows US businesses to outsource manufacturing and industrial sector jobs to
Mexico, because of cheaper labor and easier opportunity for production.
Domestically, this hurts the US more than it helps. As jobs leave the country,
unemployment and opportunity do also, leaving Americans jobless while others
are benefiting from American businesses. In 2011 it was estimated that the
United States shipped over 791,000 jobs in manufacturing to Mexico, and caused
the loss of over 680,000 American jobs domestically.[4]
With the job market already in a
steady decline, this sharp job loss of over half a million American
opportunities cripples the economy, and hinders and individual development that
Americans could hope for. The outsourcing of American jobs has not only hurt
the economy, but has had negative repercussions in every facet of American
life. I am not saying that it is just NAFTA or other free trade agreements to
blame for this phenomenon, but they have certainly contributed to the problem.
There
are not just domestic issues that are found in the United States, but also
problems that have arisen throughout Mexico because of this agreement.
According to a US Economy article, “NAFTA
allowed government-subsidized U.S. farm products into Mexico, where local
farmers could not compete with the artificially low prices.”2 Because of this, Mexican farmers have
gone out of business by the thousands, forcing them to abandon their
livelihoods and seek job opportunities elsewhere, including illegally migrating
to the United States. One of the biggest things that NAFTA was supposed to
accomplish for Mexico was the development of a real middle class. In my
opinion, the opposite has occurred. Because of the presence of US subsidized
farms, a significant portion of the Mexican workforce is out of work, and a
large part of the working aged men and women are leaving the country in search
of minimum wage jobs in the United States. This has crippled the development of
the Mexican economy, doing the exact opposite of what was originally
intended.
It
is without a doubt that NAFTA and numerous free trade agreements among states
around the world have their positives in terms of economic growth. However the
negatives of some of these agreements, including the example of NAFTA, usually
are more indicative of the reality of various situations. In my opinion, free
trade agreements, specifically NAFTA, should be revisited and altered to make
sure that everyone’s economy, citizens and social structures are thriving the
way they were meant to be.
[1]
Bravo, Eduardo. "NAFTA Has Fueled Job
Growth." My San Antonio. Hearst Newspapers, 19 Nov. 2012. Web. 9 Nov.
2014.
<http://www.mysanantonio.com/opinion/commentary/article/NAFTA-has-fueled-job-growth-4044746.php>.
[2]
Amadeo, Kimberly. "NAFTA Pros and Cons." About News. About, 23 Aug. 2014. Web.
9 Nov. 2014. <http://useconomy.about.com/b/2008/04/24/nafta-pros-and-cons.htm>.
[3]
Aguilar, Julian. "Twenty Years Later, Nafta Remains a
Source of Tension." New York Times. The New York Times Company, 7 Dec. 2012. Web. 9 Nov. 2014.
<http://www.nytimes.com/2012/12/07/us/twenty-years-later-nafta-remains-a-source-of-tension.html?_r=0>.
[4]
Strachan, Maxwell. "U.S. Economy Lost Nearly 700,000 Jobs
Because Of NAFTA, EPI Says."Huffington
Post. The Huffington Post, 12 May 2011. Web. 9 Nov. 2014.
First of all, I like how Angad realized both sides of the argument. He understands that there are positives and negatives to NAFTA, but, as he puts it, the negatives outweigh the positives. I would agree with Angad's argument. Although NAFTA has enabled larger economic growth, the drawbacks from creating that growth carry a lot of weight. The main negative to NAFTA for the United States is the outsourcing we do for cheap labor in Mexico, which directly goes against the point of NAFTA. Although NAFTA was signed to help facilitate trade and solve the economic problems of North America, it has actually had adverse effects in achieving that. I also agree with Angad's point that NAFTA could be edited to solve these negative effects of the first version of the agreement to create a system that truly works.
ReplyDeleteAs Mark said above, Angad does a good job on understanding each side of the argument. A common mistake people make is not looking at the opposing argument, which takes credibility away from one's personal stance. Additionally, I agree with his stance that the negatives outweigh the positives. There are multiple examples as to why such as the fact that 680,000 jobs were lost domestically. While NAFTA and other organizations do not solely hold the blame, they contributed to the outcome. This is a huge deal, and it needs to be addressed. Like Mark and Angad proposed, the agreements need to be revisited in order to promote positive change for all parties involved.
ReplyDeleteIf the cons outweigh the benefits for NAFTA, then why are Mexico and the United States still in it? Who are the domestic and international winners and losers, and are they those we generally consider to hold a preponderance of power? If so, do we expect to see a shift away from NAFTA in the future? Why or why not?
ReplyDeleteIn short, Mexico and the US are still a part of NAFTA because it does have benefit on the overarching economic systems of both countries. Some things that it does actually improve are the GDP, imports and exports, and overall production. However, in reality, NAFTA harms domestic businesses, and the average American and Mexican worker. American jobs are being outsourced for cheap labor, and tougher working conditions, allowing businesses to save money on the costs of production. While this helps private business, it hurts everyday American citizens in the secondary and industrial sector of employment. This essentially contributes to the extremely high unemployment rate in the US. Outsourcing these jobs, doesn't make this any better, it simply makes it worse.
ReplyDeleteI think the reason there isn't a bigger drawback against NAFTA is because the people who are benefiting are the ones who are in positions of power. The big businesses and their economic leaders are seeing the positives of this trade agreements for their companies, which is why NAFTA is still going strong. These economic powerhouses have significant sway in political organization, and economic agreements, meaning they can affect which agreements remain. The average American worker does not have this same amount of influence, and therefore cannot get their own voices across to political leaders.
In this sense, I do not see a shift away from NAFTA in the near future. The people who would actually want this change, do not have the political pull to make it happen. That opportunity rests with big business leaders and politicians, who reap the rewards of such a free trade agreement.