To win over support from Wisconsin voters, presidential candidates begin to focus on economy and employments rate. Both Trump and Sanders said they led the opposition to NAFTA and permanent normal trade relations with China, which they said have cost millions of U.S. jobs and led to “a race to the bottom” for workers.
(Bernie Sanders picketed against Nafta in the Nineties and has slammed the treaty for suppressing US wages in televised debates)
Politicians declare to bring the lost jobs back to America by means of abandoning trade agreement of NAFTA and also in terms of incoming TPP. However, free trade, in fact, would benefit the whole US instead of robbing jobs from US to other countries.
The North American Free Trade Agreement (NAFTA) provides preferential tariff treatment on goods originating in and traded among Canada, Mexico and the United States. Such trade agreements are not only economic, but political, developing closer relations and partnerships among the member countries.
The most direct and short-term effect of trade partnership is reducing jobs, because in the less comparatively competitive industry companies will lose the protection by tariff and have to fire part of workers. That’s why the insurrection handed Michigan’s Democratic primary to Bernie Sanders while continuing to buoy the insurgent Republican candidacy of Donald Trump two weeks ago.
In fact, free trade agreements bring significant advantages and most of the low-wage job loss is more part of ongoing modernization and globalization than a consequence of the trade agreements themselves. For example, now that NAFTA is a relatively mature 22 years old, it appears that it has been a net positive, but neither as great as its proponents once argued nor as bad as its opponents warned. Trade among the three members (Canada, Mexico and the U.S.) is up 300% and they are now each other’s largest trading partners. Economies have been modernized and integrated, more direct investment in the poorest country, Mexico, has been facilitated, and real wages are up. Ross Perot’s “giant sucking sound” of jobs moving to Mexico was never heard—though manufacturing jobs are down, manufacturing is up and productivity, not NAFTA, is the difference. Jobs move because of cheaper labor, not lower import costs. And many higher-skilled jobs have been added.
CreditFabrizio Costantini for The New York Times)
NAFTA could create more jobs in other divisions other than those lost, by creating regional integration. Taking auto industry for example, the main competitors for US is not either Canada or Mexico in the partnership, but Japan and Germany. The integration of North America would increase the comparative advantage in US auto industry: as a platform of much lower wage, Mexico could focus on providing car accessories to US at a lower rate and manufacturing, thereby increasing the scale of production. Even car manufactures from other countries could take advantages of this e.g. the Honda CR-V assembled in El Salto, Jalisco, for example, uses an American-made motor and transmission. The industrial clustering in Mexico would bring job opportunities to the whole North America and prevent the potential production chain which could be developed in Asia.
Tearing up NAFTA won’t bring benefit to US citizens. If we were to follow Mr. Trump’s saying and to raise a big tariff on imports, (and cope with the barriers raised by other countries in retaliation), huge disruptions would rise up in the short term, for both suppliers and workers.
Those presidential candidates are simply focusing on short-term and most obvious part to attract votes for themselves. Free trade benefits the world by allocating the resources more smartly. Workers harmed by free trade need better ways of adjusting to it — as do those threatened by domestic competition or new technology. What the government can do is care more about management cost and provide assistance to blue-collar workers. Banning trade agreement, no matter NAFTA or the incoming controversial TPP, is clearly not the solution to the economy anxiety.