“Trade is responsible for two out of ten job losses. What is happening is that the other eight are not lost because of trade, but because of new technologies, innovation, productivity. According to the U.S. Trade Representative, Robert Lighthizer, the Trump administration`s goal was to “stop the haemorrhage” of trade deficits, plant closures and job losses, pushing for tougher labor and environmental protection measures in Mexico and removing “Chapter 19 of the Dispute Settlement Mechanism” – a Canadian favorite and a thorn in the side of the U.S. wood industry. A better solution than protectionism is to include rules in trade agreements that protect against inconvenience. The main criticism of free trade agreements is that they are responsible for outsourcing employment. There are seven drawbacks: US President Donald Trump opposed it during his election campaign and promised to renegotiate the agreement and “open it” if the United States could not get its desired concessions. A renegotiated agreement between the United States and Mexico-Canada was adopted in 2020 to update NAFTA. But why did Trump and many of his supporters see NAFTA as “the worst trade deal of all time,” while others saw their main flaw as a lack of ambition and the solution as even more regional integration? What did we promise? What was delivered? Who were the winners of NAFTA and who were the losers? Read on to learn more about the history of the agreement, as well as the key players in the agreement, and how they paid off. However, it is difficult to say whether NAFTA is directly responsible for this decline. The automotive industry is generally considered to be one of the most affected by the agreement.
However, although the U.S. auto market was immediately open to Mexican competition, employment in this sector increased for years after nafta was launched, peaking at nearly 1.3 million in October 2000. That`s when jobs started to soar and losses became steeper with the financial crisis. At its lowest in June 2009, the U.S. auto industry employed only 623,000 people. While this figure has risen to 948,000, it remains 27% below its pre-NAFTA level. Foreign direct investment flows, as well as bank loans and other types of foreign financing, have financed the construction of thousands of Mexican and Canadian factories that produce goods for export to the United States. Since 1993, Canada and Mexico have raised $326 billion in direct investment from all sources. One result is that the United States absorbed 84% of total Mexican exports in 2002, up from 77% in 1993.5 Growth in U.S.
imports from these plants contributed significantly to the growing U.S. trade deficit and the resulting job losses. The growth of foreign production capacity in these plants has played an important role in the rapid growth of exports to the United States. Free trade agreements are treaties that regulate the tariffs, taxes and tariffs that countries collect for their imports and exports. The most well-known regional trade agreement in the United States is the North American Free Trade Agreement. Real exports of goods to Canada increased by 50% between 1993 and 2016 and real imports of goods increased by 41%.