The link between NAFTA and lost manufacturing jobs

Report: Ohio lost fourth-most jobs under NAFTA

Excerpt:

U.S.-Mexico trade since the adoption of the North American Free Trade Agreement has displaced 682,900 U.S. jobs, with Ohio losing the fourth most jobs, according to a report from a Washington, D.C.-based think tank.

About 34,900 jobs in Ohio were displaced from 1994 to 2010 as a result of trade deficits with Mexico, according to the Economic Policy Institute, which studies the economic conditions of low- and middle-income workers.

California posted the largest loss with about 86,500 displaced jobs.

....


The institute said the trade deficit and job displacement occurred as NAFTA made it attractive for foreign investors to pour money into Mexico to gain duty-free access to the U.S. market. Foreign direct investment tripled as a share of Mexico’s gross domestic product and caused companies to outsource jobs and production to Mexico, the report said.

Most of the jobs displaced by trade to Mexico as of 2010 were in manufacturing, with 415,000, or 60.8 percent, of jobs displaced, the report said. Within manufacturing, the hardest hit jobs were in computer and electronic parts, with 150,300 jobs displaced, or 22 percent of the total, and motor vehicles and parts, with 108,000 jobs displaced, or 15.8 percent of the total.

Comment: On the other side of the equation, the cost of goods was reduced.

The Democrats and NAFTA: full pander-mode

Democrats vs. Trade

Excerpts:

Driving this debate is the unpopularity of NAFTA in Ohio. In 2006, Ohioans elected one of the most anti-trade politicians in America, Sherrod Brown, to the U.S. Senate. With these voters at stake, Obama denounced NAFTA (and Hillary’s alleged support for it) during a speech in Lorain Sunday afternoon. "One million jobs have been lost because of NAFTA, including nearly 50,000 jobs here in Ohio,” Obama claimed. “And yet, 10 years after NAFTA passed, Sen. Clinton said it was good for America. Well, I don't think NAFTA has been good for America — and I never have.”

But when asked later, Obama said he wouldn’t pull the U.S. out of NAFTA, because doing so “would actually result in more job loss . . . than job gains.” This is true, of course. Even a politician in full pander-mode can’t deny that NAFTA, like any free-trade agreement, created jobs as well as destroyed them. Free trade allows countries to shift resources to where they are most productive relative to the countries they are trading with. We hope that Barack Obama is familiar with the concept of comparative advantage. We hope (audaciously?) that the pursuit of votes rather than gross ignorance has led him into this wilderness of incoherence.

And Hillary? Her reaction to Obama’s attacks is an even more worrying sign that the Democratic party is growing more protectionist. Fearing the credulousness of Ohioans, she has not pushed back against Obama’s economic charlatanism. Indeed, putting her faith in the credulousness of Ohioans, she has called for a “time out” on new trade deals, as if our pending agreements with Colombia and South Korea would deal a staggering blow to Ohio’s economy.


Comment: So Obama is against NAFTA but wouldn't end US's participation in NAFTA! Unfamiliar with the law of comparative advantage? Explained: The Theory of Comparative Advantage - Overview