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before NAFTA, Mexican imports increased 51 percent. In the five years afterward, they jumped 91 percent. General Motors even built housing there for its new workforce. Indeed, it felt almost as if entire portions of the U.S. economy had, as it were, gone south. As for exports to Mexico, the growth rate actually declined, according to the Washington-based Economic Policy Institute (EPI).
The numbers provided a warning of what was in store for American workers: In the five years before NAFTA, the United States maintained an average trade surplus of $168 million with Mexico. In the five years after, that number plunged in the other direction, to an average annual trade deficit of $12.5 billion.
After NAFTA, as companies large and small began shifting work to Mexico, the Labor Department was flooded with thousands of petitions from workers seeking unemployment benefits based on jobs lost through trade. Among them:
Woodward Governor Company, Stevens Point,
Wisconsin: 1,330 workers
Smith Corona Corporation, Cortland, New York:
874 workers
Oxford Industries, Dawson, Georgia: 340 workers
Sara Lee, Martinsville, Virginia: 300 workers
Key Tronic Corporation, Cheney, Washington:
277 workers
Johnson Controls, Bennington, Vermont:
276 workers
Emerson Electric Company, Logansport, Indiana:
200 workers
Alcatel Data Networks, Mount Laurel, New Jersey:
120 workers
Parker Hannifin, Berea, Kentucky:
114 workers
By 2011 an estimated 1.5 million American jobs had been eliminated by imports from Mexico, according to Economic Policy Institute calculations. EPI estimated that exports to Mexico supported 791,900 jobs in 2010, meaning a net loss of about 700,000 jobs. In 2004 EPI had estimated that lost wages from NAFTA job losses were costing American workers $7.6 billion a year. That’s the equivalent of all the annual income of 150,000 American families.
To be fair, the fault lies not just with Congress. Every occupant of the White House, regardless of party, has been equally zealous in selling out workers on trade. For decades, every president has been an ardent advocate of unrestrained free trade and has resisted any significant step that might be interpreted as protectionist, even though our trading partners have been doing the opposite.
In 1976, when the U.S. shoe industry protested that it was being engulfed by cheap, government-supported imports from Brazil, President Gerald R. Ford refused to provide relief. Even though the U.S. International Trade Commission, itself a bastion of free-trade policies, had concluded that the American shoe industry was being harmed by Brazilian government policies that violated international trade law, Ford refused to side with the U.S. industry.
To impose tariffs on Brazilian shoes, he said, “would be contrary to U.S. policy of promoting the development of an open, nondiscriminatory and fair world economic system.” Two years later, Democratic president Jimmy Carter also declined to impose tariffs on Brazilian imports. At the time of Ford’s decision, the American shoe industry employed 172,000 workers. By 2012, fewer than 15,000 worked in the industry, according to the Labor Department.
In 1985, after thousands of textile industry jobs had been lost to imports, Congress passed legislation to impose higher tariffs on textile imports, but President Ronald Reagan vetoed the bill, calling it protectionist and a violation of free trade. “We want to open markets abroad, not close them at home,” he said in a refrain that had become distressingly familiar to American workers in many industries. Even though he had just killed a bill that would have saved jobs, Reagan sought to assure textile employees that he was on their side and insisted that he would not “stand by and watch American workers lose their jobs because other nations do not play by the rules.” In fact, that’s exactly what he did. There were 746,000 textile industry workers in 1984 when Congress and Reagan took up the issue of textile
Brian Herbert, Marie Landis