What is your opinion of NAFTA?

[oberliner]

Do you think on the whole it has had a positive or a negative impact over the past 25 years?

[jberryhill]

1. I'm genuinely unqualified to opine

However, a more relevant question is whether it is better than realistic alternatives and/or capable of improvement.

[oberliner]

4. Many Democrats were opposed at the time

I wonder what the general consensus is these days.

[Omaha Steve]

2. That sucking sound was jobs going to Mexico!

So I guess NAFTA sucks.

[oberliner]

3. Ross Perot lives on!

[stevenleser]

30. The data doesn't necessarily back that up

https://www.marketplace.org/2017/03/21/economy/did-nafta-cost-or-create-jobs-both

https://en.wikipedia.org/wiki/NAFTA%27s_effect_on_United_States_employment

[guillaumeb]

5. NAFTA supports income inequality by design.

It was intended to allow for the free movement of capital but not the free movement of labor.

[oberliner]

6. Income inequality has risen significantly since it's passage

No doubt there is a relationship there.

[Blue_true]

12. Income inequality worsening is not all related to NAFTA.

Automation and Artificial Intelligence has eliminated millions of what were once well paying middleclass jobs, bank tellers, insurance writers, managers, supervisors, loan officers.

[oberliner]

13. There is this report

It does suggest a relationship:

https://www.citizen.org/sites/default/files/nafta_factsheet_deficit_jobs_wages_feb_2018_final.pdf

[guillaumeb]

16. Agreed.

And outsourcing to low wage countries with an English speaking workforce.

[Yavin4]

20. The Fed's interest rate policies are more responsible for income inequality than anything else.

When you lower the cost of borrowing, you raise the value of assets. The top 1% own these assets, and the next top 10% facilitate the buying and selling of these assets. Think bankers, corporate lawyers, accountants, insurance, etc.

[guillaumeb]

29. The decline of unionization is far more responsible.

As unions were attacked, inequality rose.

[Adrahil]

31. This nt

[Yavin4]

33. On Edit - They kind of go hand in hand.

The Fed can monkey around with interest rates because they don't have to fear wage pressure from American labor. If labor were still a major force politically and economically, the Fed would not have the ability to set rates at 0% or near 0% as they've been since 2008 without triggering hyper inflation.

Reagan destroyed the political power of unions.First, he broke PATCO and didn't suffer any political consequences for it. Then in 1984, he defeated the last strong, pro-union Democratic nominee to run for the presidency, Mondale. After Dukakis lost in 1988, the Democratic party started moving away from labor entirely. Globalization and automation killed unions off economically.

[bobbieinok]

7. A colleague with yrs of experience in Mexico said it was v destructive of Mexican agriculture, econo

The riots that occurred in a Mexican state shortly after NAFTA passage? He said they were protesting the loss of ability to make a living. IIRC he maintained that American agricultural products flooded Mexico, at lower prices than Mexican farmers could afford to sell tbeir crops. I think it was mega agricultural enterprises wiping out the Mexican family farms like they did the American family farms.

The above is what I remember of his views. I temember being very surprised at this view, since I had assumed America would be selling manufactured goods and Mexico agricultural products.

I would appreciate any input from people knowledgable about this claimed effect of NAFTA on Mexican agriculture.

[oberliner]

9. I would appreciate input from such people as well

[Yo_Mama_Been_Loggin]

35. Yet I find many agricultural products in my grocery store that were grown in Mexico

Tomatoes mostly.

I live in Washington State which is far from Mexico.

[Tavarious Jackson]

8. This is a good read here.

Don't believe the myths..

https://www.thebalance.com/advantages-of-nafta-3306271

[oberliner]

11. Thanks for providing that info

[northremembers]

14. Good Read

It's also important to note that while Trump has been alienating traditional US trade partners he has also been reducing obstacles to Russia and it's ally China. This is part of the return on Russia's interference investment. Breaking up NAFTA will benefit China and undermine the US middle class.

Even if Trump, Pence, and the rest of Republicans in our government were wiped out by some mass act of salvation, Trump has already made breaking up NAFTA a standard platform plank of the Republican party and Fox news.

I think this is a good discussion because I think most people barely even know what NAFTA is or how it affects our economy. It's easy to sell the idea everything associated with Mexico is bad for the US. Thank you oberliner for starting this thread.

[oberliner]

15. Agreed

There is definitely a lot to this issue. I would love to see more substantive discussions about trade and its impact on the US and the world as opposed to stories about showing up late for meetings.

[mythology]

10. I think it has overall been a slight benefit to the overall economy

but that benefit hasn't been shared equally and there are definitely some who are worse off. But it's hard to tell how much because many of the jobs that have been lost haven't been lost to Mexico, but instead to automation.

I think in general trade, specifically fair trade is overall a good thing, but as with everything there will be winners and losers and in general those who are already better off will find a way to remain so.

[OnDoutside]

17. Free Trade agreements are generally good. The issue is that when industries move east/south, the US

government (successive), let the unemployed workers rot, rather than retrain them. THAT is the perennial mistake. And it is not just in the US, it happens in Europe too, eg when Thatcher closed the coal mines, the British government left people to rot. I remember being in one village in the Valleys of South Wales and there was 85% unemployment.

[dembotoz]

18. If the alternative is trumpy tariff, I like NAFTA

Do wish implementation was done better to reduce the pain it caused. New industry promotion when old industry left

[oberliner]

19. I was asking more about the overall impact of NAFTA over the last 25 years

Generally positive or negative? I've read convincing arguments on both sides.

[dembotoz]

27. but the current situation colors any discussion

don't is always seem to go that you don't know what you got til its gone.......

globalization was going to happen...if the plants did not move to mexico they would have eventually gone to china.
Nafta should have been a wake up call.

did we wake up? largely no.
did we weather the storm better than the farmers in Mexico? I guess yes.

not a resounding success or failure......for us
Unless you lost your factory job and never recovered

[oberliner]

28. Fair point

Thanks for sharing your insights.

[Garrett78]

21. Positives for one country could be negatives for another country.

And an individual American is no more worthy than an individual Mexican or Canadian.

Just something to keep in mind when reading opinions about supposed positives and negatives.

[oberliner]

22. Do you think it was positive for the US and negative for Mexico and Canada?

[Garrett78]

24. Probably more negative for Mexico and a mixed bag for the US.

We don't talk a lot about Big Ag, but when subsidized and extremely cheap corn floods Mexico, it's going to have negative consequences.

[Fresh_Start]

23. more positive than negative

most of what is blamed on Nafta is really a result of automation which would have happened in any case

[oberliner]

25. What do you think should be done to combat the negative impact of automation?

[ooky]

43. Ultimately its re-training, and it has to be at the forefront of companies planning

the shift from manual labor to automation, working with state and local government and education.

[oberliner]

44. What do you think about the concept of a universal basic income?

Do you think that could be feasible (and/or desirable) ?

[ooky]

46. That's a really good question.

I'm not against it. Given the current political climate I think its a long way off for this country, just to be realistic. As a permanent replacement for automation, or dying industries, such as coal, I do think it would be responsible if our government would determined if it would be a more cost effective solution than the current economic and social costs of dealing with unemployment. I have not studied it myself closely enough to have a developed opinion. When I say that it is ultimately re-training, that is what I am familiar with. But I think that is the responsibility of the private enterprise or industry, and perhaps the state, that is putting people out of work to include in their transition plan, including providing the resources for the re-training. My opinion is If they would just do that a lot more people could shift occupation in a comfortable way, along with the technolgy shift. The drawback now is that too many employers don't do that, and I think they need more incentive to be responsible in this way.

[ooky]

42. Low cost country labor is also a very big part of it.

My career was in supply chain and engineering in the forklift industry. We were planning outsourcing to Mexico before the ink was dry on NAFTA. Over that first roughly 10 year period we were able to close manufacturing facilities in Illinois and North Carolina and consolidate operations in our other remaining U.S. plants by adding a metal fabrication plant in Mexico. We also had to complete some additional outsourcing into Europe to bring about the full two plant closures in the U.S. In our case I would say it was about 75% LCC and 25% automation. Of course it is fluid from industry to industry, but both had a huge impact.

[Fresh_Start]

47. I understand that it is also low cost of labor

but even before nafta americans were cannabalizing jobs from high cost of wages to lower cost of wages.

Manufacturing in the northeast and midwest was 'outsourced' to the sunbelt.
And americans in the sunbelt were gloating about taking jobs from the northeast.

We all trained business that it was okay to move jobs to low cost of wages.

In the 80s I was in manufacturing....and our jobs were outsourced to high cost of wages in Europe to be closer to those markets.

It isn't always wages... it is also sometimes market.

[ooky]

48. Agree outsourcing wasn't a new concept in the 80's

but NAFTA exponentially expanded the opportunity map to do it, and later extended into the EU countries, followed by the eastern block, once open, then India, China, Korea, Vietnam etc. LCC was at the the top of the goals and objectives for myself and every Supply Chain Exec I ever met, and it became a major goal for our first tier suppliers as well, as a critical tactic in our ability to exercise control over our price contracts. When we were engineering a new product and analyzing potential new suppliers for that product, the degree of LCC sourcing strategy baked into the supplier's planning carried a lot of sway in our selection decisions.

Manufacturing close to the market was another concept that of course made sense in some cases, particularly when volumes/transport costs factored favorably, and a requirement to participate in China markets. We did both - establishing a manufacturing operation in China with a Chinese partner, and establishing a hub of offices to conduct both Chinese domestic and LCC sourcing for our western operations in Europe and the U.S.

[Hoyt]

26. I think it was good for us and Mexico, but I'm a globalist who thinks "America First" and nationism

are BS. Canada and Mexico are part of North America. I don't think you can measure the success totally on who benefited financially.

[Demsrule86]

32. Both positive and negative.

[Yo_Mama_Been_Loggin]

34. As one who lives in Washington State

Which as you know is by Canada I think it's a good thing. But we're a very trade dependent state.

[Yavin4]

36. Can the people of Washington State vote to join Canada and leave the US?

I mean, you're right there.

[Yo_Mama_Been_Loggin]

37. As tempting as it is

I'd rather stay and fight the good fight.

Though I have to say Republican administrations have ruined our relationship with Canada.

It used to be fairly easy to visit the country. Just answer a few questions and they waved you through.

After 9-11 you were required to give proof of U.S. citizenship. Not to enter Canada but to come back to the U.S.

[Yavin4]

39. You would get great health care and cheap drugs.

And a leader better looking than Trump.

[roamer65]

38. Some tweaks could be made to it, but at this point it's a done deal.

If it’s revoked, it will cause mass panic in the currency markets. Not a good thing.

[oberliner]

40. Not suggesting it be revoked

More reflecting on its impact as we are looking at 25 years since it passed (with some strong Democratic opposition).

[GoCubsGo]

41. It's a mixed bag, and it's a scapegoat.

As others have already pointed out, it has it's good points and it's bad points. But, it's also not the root of all the country's economic problems, as many seem to believe. I'm constantly hearing people blame NAFTA for what is really an imbalance with China and other Asian countries. Somehow the fact that everything is made in China is NAFTA's fault. The "NA" stands for North America. China is not part of North America, you dummies. That's a whole different game.

[Algernon Moncrieff]

45. Good idea that failed in practical execution

Canada has natural resources in abundance, and the US had capital and aging industries that were decreasingly competitive. NAFTA offered what seemed like a novel solution: allow Mexico to grow into a first world industrial democracy by allowing it to take over industries that were decreasingly less viable in the US and Canada, and (in turn) allow Mexico to become a better trading partner with the US and Canada.

The problem was that much of that industrial movement bypassed Mexico and went to China and India. What growth Mexico did see wasn't enough to overcome institutional corruption.