The Truth About NAFTA - PhillyBlog

eldondre · #1 (**permalink**) 03-03-2008, 01:03 AM

It's not really a bad thing. It's different things to different people.

Quote:

Sens. Hillary Clinton and Barack Obama have had to adjust their messages as they have shuffled between hard-hit Ohio and robust Texas, where Nafta is largely seen as an economic boost to the state's border communities...n Ohio, Nafta has become the ultimate symbol of antiglobalization sentiment and is a constant source of contention between the two candidates. The agreement went into effect under President Bill Clinton in 1994 and created what remains the largest trade bloc in the world based on the combined gross domestic product of its member nations: the U.S., Canada and Mexico. Sen. Obama has consistently criticized Sen. Clinton for supporting Nafta during her husband's administration. "The fact is, she was saying great things about Nafta until she started running for president," he said on a recent visit to a factory in Lorain.
At a speech in Nelsonville yesterday, Sen. Obama attacked Sen. Clinton's proposal to create a "time out" on trade agreements until they can be reviewed. "The world will not pause," Sen. Obama said. "China's not pausing. India's not pausing."...
"Hillary has gone on the record saying that Nafta was a mistake," a woman says. "She wants to change it from free trade to fair trade," another worker says.
But the towns along the Texas-Mexico border have a very different impression of the trade agreement. In the past decade, Laredo has gone from an impoverished backwater to one of the nation's largest inland ports. Its population has grown from 72,000 in the early 1990s to 250,000 in 2006.
Sen. Clinton pointed to the Nafta paradox after an event focused on poverty in Hanging Rock, Ohio. "I'm well aware that many parts of our country have different views about trade. I was in Laredo as I said last week, and it has greatly benefited from trade," she told reporters. "We need to maintain the positive aspects [of Nafta] but get very specific on what we are going to do to fix it."

http://online.wsj.com/article/SB1204..._us_whats_news

MayfairMeat · #2 (**permalink**) 03-03-2008, 01:11 AM

The Bush Administration (H.W.) was very pro-NAFTA while the agreement was in the midst of negotiations.

Rightly so. If you are only looking within the country, NAFTA has immensely benefited Texas at the expense of the Midwest.

Out of the entire Southwest US, Texas has seen a huge boom in railroad freight traffic and highway vehicular traffic coming from Mexico.

The migration of the domestic population mirrors this trend. Midwesterners are fleeing the Midwest like crazy and moving south. Drive around anywhere in Texas and you'll see plenty of out of state plates being driven by "new-Texans" who just got jobs down there. The most common I noticed while living down there after NAFTA passed were OH, IL, MI, WI, SD and yup... PA. The last company I worked for in Texas before I moved to Pennsylvania had a lot of Pittsburgh refugees working there, who hadn't been in the state more than 3 years. Of course, kids who grow up in TX and don't want to go to TX universities (or Duke and Notre Dame) look up this way... so we do get kids from the South moving up here, at least temporarily, to get a college education.

A lot of PA and NY retirees are also picking TX over FL now thanks to the housing bubble (buying a house in TX is still cheap).

There are still plenty of Texas Republicans out there who orally poo-poo NAFTA on AM talk radio stations (especially AM550-KTSA), but trust me, they all want NAFTA to stay just like it is.

eldondre · #3 (**permalink**) 03-03-2008, 01:19 AM

Quote:

Originally Posted by EastChestnut

...
The migration of the domestic population mirrors this trend. Midwesterners are fleeing the Midwest like crazy and moving south. Drive around anywhere in Texas and you'll see plenty of out of state plates being driven by "new-Texans" who just got jobs down there.
...

FYI, the midwest was emptying out long before NAFTA. when we were down there, texans joked that the last person to leave MI had to shut the lights out (that was the early '80's).

Illiniwek · #4 (**permalink**) 03-03-2008, 02:59 AM

The term "rust belt" is plenty older than NAFTA.

TC08105 · #5 (**permalink**) 03-03-2008, 08:31 AM

EastChestnut Wrote:

Quote:

The last company I worked for in Texas before I moved to Pennsylvania had a lot of Pittsburgh refugees working there, who hadn't been in the state more than 3 years. Of course, kids who grow up in TX and don't want to go to TX universities (or Duke and Notre Dame) look up this way... so we do get kids from the South moving up here, at least temporarily, to get a college education.

East, the use of the term "refugees" to describe those fleeing the north is fitting. A lot of my friends have fled as well. Not young kids, either. I'm talking people from 45 to 55 years of age.

Many are fleeing to North Carolina as well as Texas. There's a reason for this migration. Many of the people I know are just sick and tired of the politics, overtaxation and lack of freedom.

Educated people don't want to live in an area that is run like a banana republic. Look at Detroit. Philadelphia is just one step away from commiting suicide by union as the former motor city.

brooklyncat · #6 (**permalink**) 03-03-2008, 09:33 AM

NAFTA created a "free trade" zone with both Canada and Mexico, correct?

then why did it benefit southern border states but not northern?

i don't know a lot about this...but it seems that every factory closing is getting blamed on NAFTA right now (which is funny, because I can't recall hearing anything about it since the mid-90s), when there must be other forces at work as well.

did manufacturing go to canada as well as mexico?

GMonkey · #7 (**permalink**) 03-03-2008, 09:38 AM

Quote:

Originally Posted by eldondre

FYI, the midwest was emptying out long before NAFTA. when we were down there, texans joked that the last person to leave MI had to shut the lights out (that was the early '80's).

So true. Tons of my childhood friends moved away to Texas!

raider.adam · #8 (**permalink**) 03-03-2008, 09:45 AM

Quote:

Originally Posted by brooklyncat

NAFTA created a "free trade" zone with both Canada and Mexico, correct?

then why did it benefit southern border states but not northern?

i don't know a lot about this...but it seems that every factory closing is getting blamed on NAFTA right now (which is funny, because I can't recall hearing anything about it since the mid-90s), when there must be other forces at work as well.

did manufacturing go to canada as well as mexico?

Labor costs aren't significantly cheaper in Canada like Mexico.

eldondre · #9 (**permalink**) 03-03-2008, 11:58 AM

Quote:

Originally Posted by raider.adam

Labor costs aren't significantly cheaper in Canada like Mexico.

This is the usual reply but I tend to wonder if its really valid. Mexico has been losing jobs to China. US manufacturing has been growing...in certain areas not named the Midwest or Northeast (texas and the south in particular). Many companies move jobs to high cost locations such as this:

Quote:

Teva Pharmaceutical Industries Ltd., the Israeli generic drug-maker that has its U.S. headquarters in North Whales, said it will spend world's biggest generic-drug maker, Israel-based $99 million to expand production at a plant in Ireland.

http://www.philly.com/inquirer/break...ish_plant.html which is another place where those jobs have grown.

I think NAFTA has come to symbolize the discontent of many with their current situation but may not actually have much to do with it. Fundamentally, the US, particularly the Midwest and Northeast, are uncompetitive and have been unable to adapt to the changing world around them. Even if NAFTA and the rest of the world didn't exist, the northeast and midwest woudl still be geetting pants'd by Texas, the south, and the sunbelt. I walked through 30th st station this morning and witnessed five guys changing a light bulb. A simple flourescent light bulb. I had to do a double take. no wonder Amtrak fares are so high. These guys are undoubtedly well paid and I'm not begrudging them that, but does it take 5? There are other factors such as corporate taxes (our rate is 35%, Ireland's 12%), energy costs (can't build new supply), and health care costs,a nd litigation that help make costs here uncompetitive with many countries. In reality, if NAFTA had actually led to a giant sucking sound, Mexico woudl be a much better place. It hasn't. NAFTA has become a scapegoat for frustrated people and a diversion for politicians unwilling to address the more fundamental issues at work. that's my take at least.
ask yourself, how can they build affordable housing in texas but not Philly?

raider.adam · #10 (**permalink**) 03-03-2008, 12:29 PM

Quote:

Originally Posted by eldondre

This is the usual reply but I tend to wonder if its really valid. Mexico has been losing jobs to China. US manufacturing has been growing...in certain areas not named the Midwest or Northeast (texas and the south in particular). Many companies move jobs to high cost locations such as this:

http://www.philly.com/inquirer/break...ish_plant.html which is another place where those jobs have grown.

I think NAFTA has come to symbolize the discontent of many with their current situation but may not actually have much to do with it. Fundamentally, the US, particularly the Midwest and Northeast, are uncompetitive and have been unable to adapt to the changing world around them. Even if NAFTA and the rest of the world didn't exist, the northeast and midwest woudl still be geetting pants'd by Texas, the south, and the sunbelt. I walked through 30th st station this morning and witnessed five guys changing a light bulb. A simple flourescent light bulb. I had to do a double take. no wonder Amtrak fares are so high. These guys are undoubtedly well paid and I'm not begrudging them that, but does it take 5? There are other factors such as corporate taxes (our rate is 35%, Ireland's 12%), energy costs (can't build new supply), and health care costs,a nd litigation that help make costs here uncompetitive with many countries. In reality, if NAFTA had actually led to a giant sucking sound, Mexico woudl be a much better place. It hasn't. NAFTA has become a scapegoat for frustrated people and a diversion for politicians unwilling to address the more fundamental issues at work. that's my take at least.
ask yourself, how can they build affordable housing in texas but not Philly?

I think there is a big difference between analyzing company movements that are willing to go over seas and those that merely go a truck or freight rail away.