John,
Paul Krugman has an article on NAFTA you might find interesting.
HOW IS NAFTA DOING? It's Been Hugely Successful - As A
Foreign Policy
http://www.pkarchive.org/trade/nafta.html
He writes
NAFTA's defenders are saddled with a big public relations problem: The
agreement was sold under false pretenses. Over the protests of most
economists, the Clinton Administration chose to promote NAFTA as a
job-creation program. Based on little more than guesswork, a few
economists argued that NAFTA would boost our trade surplus with Mexico,
and thus produce a net gain in jobs. With utterly spurious precision, the
Administration settled on the figure of 200,000 jobs created--and this
became the core of the pro-NAFTA sales pitch.
The overall number of U.S. jobs, however, was never going to be noticeably
affected by swings in our trade balance with Mexico. Our economy employs
more than 120 million workers; it has added more than 8 million jobs since
1992. Job growth has slowed since 1994, but not because those 200,000
export-related jobs failed to materialize (the real culprit is the Federal
Reserve's interest rate policies).
If job creation isn't the point of NAFTA, what is? Another possible
justification is the classic economic argument that free trade will raise
U.S. productivity and hence living standards. Few economists, however,
thought the pact would yield large gains of this type. Mexico's economy is
simply too small to provide America with the opportunity for major gains
from trade. Typical estimates of the long-term benefits to the U.S.
economy from NAFTA are for an increase in real income on the order of 0.1
percent to 0.2 percent.
So, where's the payoff from NAFTA for America? In foreign policy, not
economics: NAFTA reinforces the process of economic and political reform
in Mexico.
Scott Merryman
On Sun, 21 Apr 2002, john hull wrote:
Howdy,
I recently visited a web page by a political scientist
that seemed to suggest that NAFTA was a failure. I'd
enjoy reading your opinions on the question of whether
NAFTA made the world a better place or a worse place,
or if it really had no impact. Also, if you could
also say why you feel this way or that would be
interesting as well.
You're the best!
-jsh
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