February 26, 2010

CATO Institute~Should the U.S. Withdraw from NAFTA?

Should the U.S. Withdraw from NAFTA?

Rep. Gene Taylor, D-MS, thinks so. According to CongressDaily, Taylor is about to introduce a two-page bill that would withdraw the United States from the North American Free Trade Agreement.

Taylor blames the agreement with Canada and Mexico for the loss of 5 million manufacturing jobs since it was enacted in 1994. This is a popular but false charge. Manufacturing jobs have declined in the past 15 years for one big reason: soaring productivity.

Overall output at U.S. factories was actually 37 percent higher in 2009 compared to 1993, the year before NAFTA took effect, according to Table B-51 in the latest Economic Report of the President. We are producing a higher volume of stuff with fewer workers because individual workers are so much more productive than they were in the early 1990s.

As I've argued before, NAFTA has spurred more trade and deeper integration among the three partner countries. It has created new opportunities for American companies and their workers to raise their competitiveness in global markets. It has strengthened ties to our two closest neighbors.

The U.S. government would be foolish to withdraw from an agreement that continues to pay huge dividends.


my comment:

The reduction of manufacturing jobs during the NAFTA raised the productivity level making the remaining jobs of higher technologically enhanced, thus hiding the fact that the real culprit is Free Trade being enacted without changing the tax structure of which was created all on product, making intentional trade handicapped by 36% Federal Tax. 
Farmers were impacted greatly by NAFTA.  The USDA had agreed to care for agriculture under the Trade Readjustment Act(TRA).  They didn't. I sent a letter to the Department handling TRA, who knew the act demanded USDA either provide TRA Service or give up the right to.  The result was the USDA providing TRA for the period after NAFTA. Beef Farmers received no compensation for their loss as the window for USDA TRA was after their greatest losses.
All this is to say, we don't need to close our borders to trade now when there is the real problem today all wrapped up in our tax structure.  If we isolate, it will unravel what we have grown.  What we need is fair trade with free trade.  One exception, add to trade rules that the same safety restrictions on domestic production be on imports.  Being as we are returning to the Constitution, EPA is now an advisory panel until we can piece meal a couple of amendments to the Constitution, if we need to.
FairTax will change the entire scope of imports.  Jobs will return to America the plenty.  It may reduce the productivity levels, but it will raise the Employment levels to employee shortages.  We haven't had that since the Federal Reserve started controlling employment levels, never allowing the number of workers to reach inflationary wage status.
Check out Table Fifty two on how manufacturing jobs are flowing: http://www.whitehouse.gov/sites/default/files/microsites/economic-report-president-appendix-b.pdf

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