Can We Afford Free Trade?


Don’t believe all of the hullabaloo more trade.jpgthe establishment media is feeding you about how Sen. Bernie Sanders (I-VT) was lying in Michigan as he cited the number of US job losses due to so-called free trade. “NAFTA, supported by the Secretary [Clinton], cost us 800,000 jobs nationwide,” Sanders said in the March 6 debate. He used 2014 research from the Economic Policy Institute.

The media is under constant pressure to get the story first. I understand that; I am a journalist. I try to get the story right, as well as first. I guess that is one of the reasons I am not working in the establishment.

The flock correctly cited a 2015 Congressional Research Report, The North American Free Trade Agreement (NAFTA), which states “NAFTA did not cause the huge job losses feared by the critics.” Unlike my colleagues in the establishment media, I read the report. It does not contain one iota of research supporting the claim, which appears in the summary. The fact is the CRS report speaks in terms of capital deficits and trade balances. The report never analyzes job creation or job losses in numerical terms.

The U.S. had a trade deficit with Mexico of $54 billion [in 2013] but with China, it was [a deficit of] $318 billion, so the [U.S.] deficit is five times bigger with China than with Mexico. In other words, you would calculate, maybe for every job we have lost in the U.S. to Mexico, five [jobs] were lost to China, according to Wharton management professor Mauro GNAFTA-job-losses-chart-e1387307604809.jpguillen. America had a $36 billion deficit with Canada in 2014.

An EPI researcher went industry by industry and converted trade deficit and surpluses into an estimated number of jobs.

“We are generating inequality [in America] because the lower wages are either stagnating or going down,” the professor says. “How do they go down? When a factory worker is earning $35 an hour, gets laid off and has to go to the service sector and only makes $12 an hour.”

On the other hand, “NAFTA has been great for Mexico,” he added. Ross Perot was right when he predicted, “There will be a giant sucking sound going south.”  The concern here is much larger than Democrat politics or fair trade vs. free trade, the big question is: Do you believe in a nation state or in a country called the United States.


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