On Mar 11, 2013, Doug Henwood wrote: >On Mar 11, 2013, Hinrich Kuhls wrote: > > >> Doug Henwood wrote: > >> > >> On Mar 11, 2013, "Anthony D'Costa" wrote: > >> > >>> On a related note, did NAFTA lead to a giant sucking sound? > >> > >> I don't think so - Mexico got underpriced by China not all that long after > >> NAFTA took effect. Maybe I'm wrong. As Lori Wallach said years ago, > >> "Henwood is not progressive on trade issues." > > > > PEN-list archives: > > What explains Mexico's revocvery of U.S. Market share? > > > http://progressive-economics-pen.1065355.n5.nabble.com/What-explains-Mexico-s-revocvery-of-U-S-Market-share-td29109.html > >That's a very partial quote! Look at figure 1 in the IMF original. >Mexico had about 12% of US manufacturing imports in 2000, vs. >China's 10%. Mexico's share rose into the signing of NAFTA, but then >fell and only rose slightly. It was only about 15% in 2012. China >rose to 20% as NAFTA took effect, than hit almost 30% in 2009-2010. >It was down some after that, but it's still around 27%.
That's a rather quick take on the obvious "how". For the "why" of the turning point you noticed look at figure 6 (Real Dollar Annual Wages: Mexico and China) on page 21: http://www.imf.org/external/pubs/ft/scr/2012/cr12317.pdf "Wages in the manufacturing sector in China have increased at an average annual rate of 14 percent in nominal yuan terms from 2003 to 2011, and close to 20 percent annually in dollar terms (Figure 6), given the appreciation of the yuan (Figure 7). In contrast, average wages in the Mexican manufacturing sector have remained fairly constant in dollar terms, underpinned by moderate wage growth and a depreciation of the peso (Figure 7). In 2003, average dollar wages in Mexico were six times higher than those in China, whereas in 2011 wages were only 40 percent higher. These developments have reduced the competitive advantage that China had as a low-cost supplier of manufacturing goods to the U.S. in the early part of 2000s. [...]" Thus, the starting point of the TPP as an "enlarged NAFTA" next year will be quite different than ten years ago - compared to China's economy. Wages in China and therefore incomes of private households as well as the national "capital stock" of China's economy have crossed a marginal line. Its growth is no longer primarely dependent on exports, but China's internal market is strong enough to crucially "influence" the global business cycle. Hence even succesful synchronized attempts of the US administration to create both the TPP and the US-EU-TTIP (*) will not succeed in containing China economically. It's not only figure II.6 in the IMF 2012 country report on Mexico that indicates a turning point of global hegemony. -- (*) Transatlantic Trade and Investment Partnership, scheduled to be signed late 2014. http://europa.eu/rapid/press-release_MEMO-13-95_en.htm _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
