Tuesday, March 29, 2016

Only part of the NAFTA story

NYT: When Donald Trump threatened to “break” the North American Free Trade Agreement, auto industry workers offered up some of the loudest cheers.
Mr. Trump easily won the Republican primary in Michigan this month. The state, home base for the American auto industry, also delivered an upset victory to Bernie Sanders, the Democratic anti-Nafta standard-bearer.
But the autoworkers’ animosity is aiming at the wrong target. There are still more than 800,000 jobs in the American auto sector. And there is a good case to be made that without Nafta, there might not be much left of Detroit at all.
“Without the ability to move lower-wage jobs to Mexico we would have lost the whole industry,” said Gordon Hanson of the University of California, San Diego, who has been studying the impact of Nafta on industries and workers since its inception more than two decades ago.
And here is the other part of the story.  Mexico is the majpr tradng partner for Texas and California.  NAFTA restored the natural trading relatinships between the three similar sized economies within the pacific/gulf trade routes.  This includes goods, oil;, labor, most of it bi-directional..  The three economies are as big as Germany, and contain about half the major ports on North America.

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