Vote: Is NAFTA a net plus or minus for the United States?

The North American Free Trade Agreement vastly increased commerce among the United States, Canada and Mexico. But it’s long been a lightning rod for criticism on the left, especially from unions. This past presidential election the opposition also came from the right with Donald Trump. Now in the White House, he insists on renegotiating the managed-trade deal. His dislike is pointed toward Mexico: He wants to build a border wall and perhaps tax Mexican imports. This upends decades of bipartisan policies.

Some facts: Last year, the United States exported nearly $212 billion worth of merchandise goods to Mexico. But because we buy more than we sell, the trade deficit was $58.8 billion. In 1985, exports were $13.6 billion, with a $5.5 billion deficit.

We sold nearly $246 billion in merchandise exports to Canada last year. But the trade deficit with Canada was more than $9 billion. Canada and Mexico are America’s largest trading partners. Washington exported $8 billion to Canada and $1.8 billion to Mexico in 2015, the most recent year for which data are available, out of a total $86.4 billion.

It’s interesting that nobody wants to build a wall on the north or tax Canadian imports.

Also, few realize that America runs a surplus in services.

Brad DeLong of the University of California Berkeley argues that NAFTA didn’t gut American manufacturing. It’s more complicated (his piece is well worth reading all the way through). I would add that the industrial Midwest probably lost more factory jobs to the “right to work” American South than to Mexico. But Dani Rodrik says, not so fast.

But the debate is about more than factory jobs. What do you think:

Take Our Poll


This Week’s Links:

Reagan, Trump and manufacturing | Paul Krugman

The trade deficit and economic growth | Econbrowser