Sunday, March 28, 2010

Why repealing NAFTA would be a mistake

Recently, U.S. Rep. Bart Stupak of Michigan, joined with two other Democrats and a Republican to urge congress to repeal NAFTA. They claim that NAFTA has cost the US thousands of jobs and not lived up to expectations.

#1: Canada and Mexico are the United States two biggest trading partners

In 2008, the US exported over $251.5 billion dollars worth of goods to Canada (up 8.8% year over year), while exports to Mexico were $137.7 billion (up 2.6%).

U.S. goods exports to NAFTA partners have surged by 171 percent since 1993!!!

#2: The jobs lost in the US were low paying, unskilled labor jobs

Many politicians main arguement against NAFTA is that it has taken away jobs in manufacturing states like Ohio and Michigan. The fact is that globalization has created an environment where the lower skilled jobs will go to the developing countries. This would have happened with or without NAFTA. Instead of fighting to keep lower skilled jobs in America, we should concentrate on retraining our workforce and giving them the skills they need to survive in the global workplace.

#3: Increased exports will help many small and medium sized businesses grow

When domestic sales are decreasing or stagnant, the best place to look for increased sales is abroad. There are people around the world eager to buy products that are made in the USA, and with the weakened dollar, now is the time to take advantage of this trend. Increased sales from exports can help some companies through a recession.

See this great article at USA Today for some success stories:
Exports help U.S. companies climb out of recession

#4: Withdrawing from NAFTA would hurt US farmers and manufacturers the most.

One of the reasons US agriculture has been so successful in other countries is because of the preferential tariffs we receive as a benefit from NAFTA. If the US were to withdrawl, we would no longer be seen as a preferred trading partner and Canada and Mexico would look elsewhere to acquire their produce, grains, etc., leaving the US manufacturers out in the cold.

Let's keep it real here...we are not currently at 10-12% unemployment in the United States because of NAFTA. Would repealing NAFTA send thousands of jobs back to the US? No! These low paying, unskilled jobs went away for a reason. NAFTA provides the opportunity for our small and medium businesses to grow and the United States to compete globally.

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