NAFTA: Our Favorite Scapegoat
December 8, 2016
Among the institutions and agreements President elect Donald Trump has vowed to kill in his first 100 days in office, the North American Free trade Agreement may be the most costly to get rid of. Trump’s logic behind withdrawing from NAFTA is that it’s a “job killer.” The idea that NAFTA has facilitated the loss of manufacturing jobs to Mexico is not entirely without basis, but it is a simplistic understanding of a complex issue. For the estimated 800,000 jobs lost due to NAFTA, the U.S. Chamber of Commerce says 6 million jobs depend on trade with Mexico, which is something NAFTA facilitates.
Surely of all political groups that should theoretically support a massive free trade zone, the Republican party should be at the top of the list. With so much of the contemporary conservative identity hinging on Laissez-faire economic policy, it is truly mystifying that some American conservatives have adopted what is ostensibly a Democratic approach to protecting American manufacturing. The North American Free Trade Agreement is also a largely successful example of free markets as a political success. The trade relations with Canada and Mexico are remarkably strong, forming America’s first and second largest trading partners respectively.
In addition to the size of these trade relations, the U.S. also maintains low trade deficits relative to trade relations of the same size. Canada specifically has a trade surplus with the United States comparable with South Korea, despite having a trade relationship almost six times larger. The strength of our relationship with our fellow NAFTA nations is an economic gem. We trade more with Canada than we do with China. Canada is also our largest single source of foreign oil; we get twice as much oil from the Canadians as we do from the Saudi Arabians, and Mexico supplies almost as much oil as Saudi Arabia. Why would we jeopardize free market institutions that have time and time again proven themselves to be fantastically profitable?
Republican hatred of NAFTA is bizarre to say the least, especially since the agreement was drafted under President Reagan. The true source of resentment of NAFTA may not be as an institution, but as a scapegoat. Perhaps NAFTA is used to place blame on jobs rather than admitting that the U.S. economy does not work that way anymore. Many working class people feel as though they are left out of the benefits of a global economy; many manufacturing jobs have been lost. Repealing or changing NAFTA won’t bring jobs back; the jobs lost are already gone. Endangering profitable relationships over dead industry will only succeed in harming the good that has already been done.
America’s global position as a leader is a product of its relationships. The drafting and maintenance of trade relationships lends the U.S. credibility. Serving those relationships out of fear that they may weaken us is a certain way to ensure that alternatives to the U.S. as a trade partner are found. Post-industrial America has experienced sincere growing pains as our economy shifts. Behind misconceptions about trade relationships lies genuine concerns about employment. Many Americans are unable to participate in this new economy, and it is their trials and hardships we must aspire to understand and empathize with.