Why US-Mexico Trade is Good for US Jobs

Commentary by Doug Donahue

From its signing some 20+ years ago, NAFTA has been a divisive issue. Ross Perot famously predicted we would hear a massive sucking sound from south of the border, as Mexico vacuumed American jobs away for good. While the pact still has vocal advocates and detractors two decades later, it’s worth looking closely at alternative scenarios had NAFTA not come into effect, as Gary Feuerberg recently did in a piece in Epoch Times, covering a forum that focused on the trade pact.

For starters, if there was no NAFTA, most American jobs that moved to Mexico would most likely end up in another low-wage country, probably China. Or, as Shannon O’Neil (senior fellow for Latin America Studies at the Council on Foreign Relations) speculated on an America without NAFTA: “Would we still see today if we had not signed: apparel made in rural Massachusetts, carpets in the Carolinas, or drill bits in Cleveland, Ohio? The answer is ‘no,’ because all these things today are made in China with whom we do not have a free-trade agreement,” she said.

She continued: “If we had not signed NAFTA, do you think we would see cars made in Detroit? Airplanes and jets made in Kansas City? Tractors in Peoria, Illinois?” she said. “The answer is probably ‘no.’”

More key figures on NAFTA

  • According to the Census Bureau, Mexico is America’s second-largest export market, behind Canada and ahead of China. Mexico is also America’s third-largest trade partner in imports, after China and Canada.
  • For every dollar spent on US imports from Mexico, on average 40 cents originated in the US. That US share of 40% of value with Mexico compares to 25% with Canada and just 4% with China.
  • Of the nearly $277 Billion in goods imported from Mexico in 2012, $111 Billion was actually made by US workers. Of the $425 Billion in imports from China, less than $17 Billion was made in America.

Source: The Epoch Times

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