Thread: Free Trade and Immigration

Free Trade and Immigration

Both free trade and immigration are hot topics in the United States these days. Senator McCain’s position on immigration has angered many conservative Republicans. On the other hand, the North American Free Trade Agreement (NAFTA) was enacted during the administration of Senator Hillary Clinton’s husband Bill, and anti-free traders oppose her nomination for that reason. Opposition to free trade is based largely on the idea that imports are harmful to Americans. While this may be true for some workers, it is not necessarily the case for either consumers or business owners.

Today, it is generally the Republicans who are the strongest supporters of free trade, but such was not always the case. For many years, the Republicans espoused the protectionist policies of Hamilton’s “American Systemâ€

There is only one little small problem in the analysis above: if you don't have a large pool of workers, you don't have many consumers...

So, the price 'reductions' to the consumer are meaningless to a very large number of citizens. If you have no job, you can't afford to purchase the widget anyway...

NAFTA good, anti-NAFTA bad? Not So Fast

American workers are right to be upset with NAFTA as they see CEO’s enriched by shipping out production to cheap-labor countries, Mexico and China primarily. Since NAFTA, Mexico ships more cars to us than we now do to the rest of the world. Did Mexico suddenly develop an auto industry? What’s next, a car from China? Yep, coming in 2008 to America…the Chinese made Geely. Get your order in now; it’s what big business wants you to do. Even without the Geely, we now have the largest trade deficit ($273 billion) with China ever in our history thanks to NAFTA. Under the Bush administration, our trade deficit has doubled and 3 million manufacturing jobs have vanished.

The Clinton administration got the NAFTA ball rolling in 1994 promising the U.S. and her citizens a wonderful life through free trade. We were even told that NAFTA would end illegal immigration. The result? Illegal immigration has accelerated, with two-thirds of illegal immigrants here having arrived since 1995. How did that happen? The U.S. essentially destroyed the Mexican small farmers by crushing them with our subsidized agribusiness imports. NAFTA opened the door for a flood of U.S. investment dollars going into Mexico to finance the cheap labor factories we wanted them to build. Mexico, instead of investing its newfound wealth into infrastructure, housing, schools, and social improvements, transferred it to government officials and its business elite. Mexico was much more interested in encouraging its poor and displaced citizens to migrate to America for work, education, health care and services than investing to keep them at home. Our government was willing to allow it since it met the cheap labor sought by business here.

With a destroyed textile industry and a shrinking manufacturing base in North Carolina, we hear the free traders extol a claimed 30,000 net jobs increase due to NAFTA. What they don’t tell you is that those are not good paying manufacturing jobs with decent benefits that a worker can build a life and raise a family on. Instead, they are the type that puts a worker into direct competition for a job with their children and grandchildren…Wal Mart, Costco, retail and service industry type.

Free trade must end. Instead, it must be replaced with fair and balanced trade where we insist on reciprocity from our trading partners. Over 200 years ago, Thomas Jefferson wrote, “Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.â€