Jewish World Review Nov. 25, 2003 / 30 Mar-Cheshvan, 5764
Free trade costs plenty
The trade talks held this week in Miami by 34 nations across the Americas broke up a day early, with only a faded "blueprint" for an eventual free-trade agreement. And for that, we can be thankful.
We should be worrying about the prospect of more jobs and more businesses being wiped out by cheap foreign labor, and we should be even more worried about those who blindly advocate free trade for its own sake. Well, actually, for the sake of a few dozen multinational corporations.
I'm neither free trader nor protectionist. And I admit to being extraordinarily parochial in my interest in this debate. My first and principal concern is that our politicians continue to advocate and negotiate trade agreements without understanding the impact on the lives of average Americans. And they negotiate these deals without enunciating a clear vision of how our quality of life in this country will be affected.
U.S. companies and multinational corporations operating in America are pushing hard for the Free Trade Area of the Americas, arguing that it will open up new markets for America's $10 trillion economy. But we've heard this specious logic before - about a decade and hundreds of thousands of jobs ago. The FTAA, which essentially expands NAFTA to a hemispheric tariff-free bloc, will only serve to further threaten our workers' livelihoods and worsen our spiraling trade imbalance.
Proponents of the 1994 free trade agreement declared that the pact would create 170,000 new U.S. jobs annually. Instead, at least 750,000 jobs were lost (through the end of 2002) as a direct result of NAFTA. The Economic Policy Institute also found that about four-fifths of those jobs were in the manufacturing sector. And when high-wage manufacturing jobs are replaced with service-sector jobs that pay at least 23 percent less, the downward pressure on the wages of Americans is accelerated.
Free trade hasn't been entirely beneficial to our trading partners, either. NAFTA supporters predicted that Mexican workers would see increased wages, stemming the tide of Mexican migration. But Mexican manufacturing wages actually fell 21 percent from 1993 to 1999, and more than two-thirds of the Mexican population is currently living in poverty. NAFTA has in, fact stimulated illegal migration to the United States. Nearly five million Mexican illegal aliens currently reside here, and more than half of them have crossed our border over the last decade.
The record U.S. trade deficit will likely worsen should the FTAA become reality. NAFTA transformed a relatively manageable trade deficit with our neighbors into a full-blown problem. While U.S. exports to Mexico and Canada have increased by 57 percent, imports have risen 96 percent. As a result, the U.S. trade deficit with those two countries has ballooned from $9 billion in 1993 to $87 billion last year. And it's only getting worse.
Thea Lee, chief international economist with the AFL-CIO, says these trends would be seriously exacerbated if NAFTA were expanded to the entire western hemisphere.
"If we open up our markets to goods from all over Latin America, and we don't put in place any kinds of protections for workers rights . we're likely to see these results on a larger scale," Lee says.
American farmers would suffer tremendously from the passage of the FTAA. Since NAFTA's implementation, about 33,000 small farmers have gone out of business - more than six times the pre-1994 rate. And this agreement would likely force Florida's 90,000 citrus growers to join those out-of-work farmers in the unemployment line. Without the 30-cents-per-gallon tariff on orange juice to compete against cheaper juice from Brazil, that state's $9 billion citrus economy - from the growers to the banks to the vendors - will be in serious jeopardy.
The creation of millions of jobs during the 1990s masked the true detriments of free trade. But now that we can clearly see the effects on our nation's workforce, economy and quality of life, it is irresponsible of the Bush administration to pursue trade agreements as if there are not exorbitant costs for so-called "free" trade.
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