NAFTA, free trade agreement between the U.S., Canada, and Mexico, was signed by then-President Bill Clinton in 1994. The agreement which was supposed to lead to the growth of all of the economies involved. What I (and I bet you, too) care most in all the trade agreements is the impact on a regular blue collar worker and the middle class. Clinton, while signing the NAFTA bill, stated that “NAFTA means jobs. American jobs, and good-paying American jobs. If I didn’t believe that, I wouldn’t support this agreement.” Also, prominent economists and government officials predicted that NAFTA would lead to high trade surpluses with Mexico and that hundreds of thousands jobs would be created. Sounds great, right? But what happened in reality?
- Trade “surplus”: in 1993, when NAFTA was passed, the U.S. had a small trade surplus with Mexico, in 2013 the trade deficit was more than $50 billion.
- U.S. jobs: Growing trade deficits almost always result in growing trade-related job displacement; according to the survey held in 2010, U.S. trade deficits with Mexico had displaced 682,900 U.S. jobs. About 115,000 are likely economy-wide job losses because they were displaced in 2007-2010, when the U.S. market was severely depressed, but it’s difficult to argue that NAFTA was one of the major contributing factors. One of the main purposes of the agreement was to make U.S. companies feel free to openly operate in Mexico, where labor costs are way lower than in the U.S. And that was the time when blue collar wages began to stagnate.
- Mexican jobs: Mexican unemployment also rose. It is blamed on NAFTA for exposing Mexican farmers, especially corn producers, to competition from heavily subsidized U.S. agriculture.
- Migration: facts mentioned in the previous point led to the rise of both legal and illegal migration to the U.S. Migration to the United States, both legal and illegal, more than doubled after 1994, peaking in 2007.
- Other: NAFTA also missed its goals in environmental protection, immigration, drug trafficking, etc.
Free trade had been a central issue to Bill and Hillary Clinton until recently, when workers, activists, and labor unions (or maybe Hillary’s main opponent, who knows) started their active and open criticism towards it. Now Clinton converted from a huge fan of globalization to critic and her laughable attempt to appeal to the most struggling now blue collar working class and it could be a sign of sunrise of some sanity in Hillary’s mind. But we all know good old Clintons and what their promises are worth. By the way, Bill still defends NAFTA, less than two years ago he said, “NAFTA is still controversial but people will thank me for it in 20 years.”
Who benefits from NAFTA and other free trade deals? I’ll tell you. The stockholders, CEOs and other senior management of those companies, who moved their production to the countries with cheap labor force and rent rates.
And who the Clintons have always supported? CEOs of corporations, who use that cheap labor force.
While some people call her switch from globalization to anti-globalization “an evolution of her thinking”, personally I have no ground to trust her words. (You can read how Hillary has changed her position on free trade through time here.) She has betrayed us so many times that there’s not a single reason to believe that she won’t do it this time. Fun fact: renegotiation of NAFTA was one of the main points in Obama’s 2008 campaign. But guess what? He didn’t deliver. And Hillary will say anything to get elected, too.
HRC’s main donors are corporations and they are those who she will never betray. Not regular citizens. Not working or middle class. And if Hillary is elected President in November, she will do her best, use all of her power to please her masters from transnational corporations at the expense of American working and middle class.
What do you think about Hillary’s promises? Do you trust her? Do we, the American people, have a chance to gain our wealth back?