SalemNews.com, Salem, MA

March 29, 2014

Column: NAFTA, 20 years later

Joseph F. Doyle
The Salem News

---- — With major trade issues on the agenda in Washington, D.C., and the “powers that be” celebrating the 20th anniversary of NAFTA, I thought now would be a good time to explore the ways NAFTA has helped the American economy and the everyday American worker. NAFTA was originally conceived by George H.W. Bush and was signed into law by Bill Clinton.

The initial promise was that NAFTA was to create 200,000 new jobs in the United States and enhance the opportunities for new trade with Canada and Mexico, our biggest international trade partners. There was a debate on CNN just before the bill was signed, featuring Vice President Al Gore and billionaire Ross Perot, which painted a picture of a fantastic opportunity to increase exports from the U.S. to our two top trading partners, and to increase the number of jobs in the United States and incentify U.S. corporate investment domestically.

Perot countered that Americans would recognize “the giant, sucking sound of jobs leaving America,” due to the 7-1 differential in wages and benefits between the U.S. and Mexico, with the U.S. government offering tax advantages for the creation of jobs abroad. Sarcastically, Perot added, “And there is a tooth fairy, and there is an Easter bunny.” He pointed out that Gore’s political point of view was directly opposed to his own (Perot’s), the real business point of view.

The financial incentives over the past 20 years in this off-shoring environment have NAFTA-involved corporations paying little or no taxes. The American taxpayer is paying corporations for every job created by NAFTA outside American borders. To be clear, the 200,000 domestic jobs never materialized. Since NAFTA, over the last 20 years, 40,000 U.S. factories have dissolved, and a million U.S. jobs have disappeared. A million middle-class jobs have evaporated under NAFTA, each job representing a family. Each family formerly paid local, state and federal taxes. They also contributed to the American economy, which was the American way of life.

The now transnational corporations use the cudgel of cheap labor, no benefits and no environmental oversight to depress wages domestically (in the U.S.), and this Bush-Clinton-Bush hallucination of accelerated job growth and domestic investment is one of the major reasons the U.S. has not bounced back completely from the Great Recession of 2008-2009, which still lingers on unless you’re in the top 1 percent or work, in some capacity, for the government.

According to the International Trade Council, there has been a 700 percent trade increase over the last 20 years of NAFTA, but that’s primarily in the form of imports, with a net decline in exports from the U.S. of 62 percent since NAFTA’s inception. The U.S. Trade Commission has said that the aggregated U.S. financial obligation to our two largest trade partners is $177 billion as of February 2014. To put that in perspective, before NAFTA, we had a trade surplus with Mexico, and a $30 billion trade deficit with Canada. In cash alone, that’s a $137 billion negative financial swing, along with the hemorrhaging of a million middle-class jobs, a loss of hundreds of billions in potential tax revenue from corporations and individuals that are now offshore, and the evisceration of the manufacturing base of America.

We have many reasons to scrap NAFTA. The experiment worked for Washington, D.C., and the transnationals, but it’s not working for the United States of America. We need the trade balance back; we need the jobs back; we also need to choke off the convenient opportunity for the smuggling of tons of heroin and cocaine into the United States.

We need America back. Getting rid of NAFTA could be our first step.

Joseph F. Doyle is a freelance writer based in Salem.