NAFTA

Report: NAFTA Turns 20

 

by Dave Johnson

The report compares the promises with which NAFTA was sold with the results we can measure 20 years later.

NAFTA was not just a “trade” agreement. Trade agreements focus on cutting tariffs and easing quotas and barriers to goods moving across borders. The report points out that NAFTA was much more, giving corporations special rights, incentivizing offshoring and limiting regulation. As the report puts it:

“NAFTA created new privileges and protections for foreign investors that incentivized the offshoring of investment and jobs by eliminating many of the risks normally associated with moving production to low-wage countries. NAFTA allowed foreign investors to directly challenge before foreign tribunals domestic policies and actions, demanding government compensation for policies that they claimed undermined their expected future profits. NAFTA also contained chapters that required the three countries to limit regulation of services, such as trucking and banking; extend medicine patent monopolies; limit food and product safety standards and border inspection; and waive domestic procurement preferences, such as Buy American.”

Some of the effects of NAFTA that are highlighted in the report include:

• a $181 billion US trade deficit with NAFTA partners Mexico and Canada,
• one million net US jobs lost because of NAFTA,
• a doubling of immigration from Mexico,
• larger agricultural trade deficits with Mexico and Canada,
• more than $360 million paid to corporations after “investor-state” tribunal attacks on, and rollbacks of, domestic public interest policies.

The data also show how post-NAFTA trade and investment trends have contributed to:

• middle-class pay cuts, which in turn contributed to growing income inequality,
• US trade deficit growth that is 45 percent higher with Mexico and Canada than with countries not party to a US Free Trade Agreement,
• US manufacturing and services exports to Canada and Mexico growing at less than half the pre-NAFTA rate.

The report lists and details many, many more such outcomes.

“NAFTA’s actual outcomes prove how damaging this type of agreement is for most people, that it should be renegotiated and why we cannot have any more such deals that include job-offshoring incentives, requirements we import food that doesn’t meet our safety standards or new rights for firms to get taxpayer compensation before foreign tribunals over laws they don’t like,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

The report also points out that the public “gets it” that NAFTA hurt the country.

“According to a 2012 Angus Reid Public Opinion poll, 53 percent of Americans believe the United States should “do whatever is necessary” to “renegotiate” or “leave” NAFTA, while only 15 percent believe the United States should “continue to be a member of NAFTA.”

See the report here:
http://www.citizen.org/documents/NAFTA-at-20.pdf