NowThis ‘Fact Check’ on NAFTA Mostly False
Yup, that’s right, this NowThis “fact check” is, drum roll please … mostly false. You don’t have to like Donald Trump but here are the facts:
First, yes, George H.W. Bush signed the agreement between the three nations as a lame duck president but it was not law – it was just a treaty proposal. Bill Clinton “signed” NAFTA INTO LAW in 1993: https://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement
That’s what Trump is saying and it’s fact. I know, I was on the front lines of the battle to stop it in Boston back in the early 1990s. And what is worse is that Clinton was able to get it approved into law by bribing votes in the Congress. Gerry Studds, who was on the fence, as an example, vote for it after Clinton got a $1 billion fisheries study issued for his district, Cape Cod and the Islands, something that had nothing to do with trade or NAFTA.
NAFTA went into effect in 1994. A year later, Clinton “signed” GATT/WTO, another global trade deal that had been negotiated for a number of years before, into law. I also have a copy of that treaty, too. It went into effect in 1995.
Both trade deals were negotiated by bureaucrats, not elected officials. That’s a bigger issue for another day.
It’s true that between 1993 and 1998, manufacturing jobs increased while Clinton was president by 700,000 when compared to when Bush left office (16.9 million jobs when he came into office and 17.6M in August 1998, according to the data). However, every year after that, it nosedived. Why? Because of the trade deals – which eliminated tariffs on imports, a source of revenue for the government – making it cheaper to move the jobs to other countries and bring the products into the United States without the tariff.
Here’s another graphic where you can see the huge trade deficits – the massive amount of red – dropping into the negative beginning in Clinton’s second term: http://cdn.factcheck.org/UploadedFiles/2016/03/Trade-Balance.png
The United States has been running massive trade deficits due to these trade deals for nearly two decades. The trade deficit in 2015 alone was more than $500 billion. That’s the equivalent of building 2.5 million $200,0000 homes in the United States … in one year. That’s the equivalent of 7.4 million $50,000 a year salaried jobs with family health care plans. In other words, the trade deficit is real money. As you can see from this Census memo, it hasn’t always been that way. All told, according to the Commerce Department, about 8 million manufacturing jobs in the United States have been lost since the passage of NAFTA, and almost all of them based on closed factories here and opened factories elsewhere.
Why is this important? Haven’t those jobs been replaced with other jobs? It’s important because those were low skill, decent wage jobs, not 7-Eleven jobs. One parent could raise a family on the money earned building Fords in America. Now, a Ford Fusion sedan, priced at $39,000, I know, I looked at one last year, is ENTIRELY made in Mexico. That used to be a UAW job in the battlefield of Detroit. Economists estimate that for each manufacturing job, there are five to seven other jobs connected to that job (in the service and retail sectors, it is one to two jobs for each). So, at least another 40 million jobs have been lost – possibly more – due to those lost manufacturing jobs.
This data also bears reality when looking at the labor participation rate which has gone from 66.6 percent when NAFTA was approved to 62.8 percent today. With 243 million people of working age, minus the 21 million in college full-time and the 12 million on disability but adding back people over 65 in the workforce, you can do the math and see how this is a problem. The United States has tens of millions of people not working and many more working multiple jobs to get to a reasonable living standard.
I’ve been studying international trade for more than 25 years. I co-founded an educational non-profit attempting to stop NAFTA and GATT that ran ads and held seminars about the trade issues. These are the actual facts. The video is wrong.
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