In 1993, NAFTA, then President Clinton signed a trade agreement that has had contested reviews, gains and drawbacks. NAFTA, which stands for the North American Free Trade Agreement, was an agreement between the U.S., Canada, and Mexico. It sought to remove all existing trade barriers and tariffs between the three countries. In December 1993, the the U.S., Canada and Mexico signed the agreement. At the time, it was generally favoured by both political parties. It’s no question that the elimination of tariffs and duties between the three nations saw an explosion of trade. But where the value went is another question entirely.
The 13 years since the agreement was signed have resulted in a decrease in valuable of manufacturing jobs that have stripped the bottom underlining of the American economy; while America’s trade deficit with Mexico increased dramatically. As attested by the WTO, there have been some benefits from the deal. Most of them seen by wealthy manufactures south of the border as well as the wealthiest of American manufacturers who have the financial and industrial mobility to close down and set up shop somewhere else. All this comes at a detriment to thousands of lives who work for very little pay south of the border. The same job could be achieved in America with the right regulatory framework.
Before NAFTA came into effect, the American rust belt actually wasn’t so rusty.
It’s hard to hide the fact that President Obama, Hillary Clinton and the Democrats have been huge proponents of NAFTA. Democrats have cared little about manufacturing jobs and don’t have much of an interest in small business manufacturers; they usually care more about services like banking and elite interests, to put it bluntly. During last week’s presidential debate, Hillary emphatically told the world that she “wished” NAFTA would have been good. She then backtracked and said that she didn’t support it. Crooked Clinton also claims she voted against NAFTA which is absolutely untrue.
While wealthy service sector banking elites that support Hillary Clinton’s campaign might think otherwise, manufacturing is vital to the American economy.
Trump’s stand is clear. Manufacturing was negatively affected as the result of the trade deal. Studies also show that the deal has destabilized Mexico’s rural industries. Possibly culminating in the violent drug related crime we have seen recently. In the meantime, Hillary, who admittedly supported the deal, hoped it was a great deal (which means it isn’t). Then she flip-flopped and said nothing really tangible on the matter. What exactly is her stance?
The media blasted Trump for complaining about NAFTA while making ties and suits from his clothing line in factories in China. What is comfortably left out is that as a manufacturer of tangible goods like ties, the trade deal leaves no option but to work outside of the United States; it simply isn’t scalable for manufacturers. While Hillary has never manufactured anything in her life, Trump can envision a way to make American manufacturing valuable again. Of course, it can be done within the proper regulatory framework. While the original vision for NAFTA was to make the three North American economies more integrated and resilient, most companies ended up moving to China. This is due to cheaper labor costs. The surplus of which is now worth a trillion dollars.