Tag: NAFTA

Trade Deals and Alternative Facts: Now Fresh at Project Syndicate

Posted on by Brad DeLong
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Project Syndicate: Trade Deals and Alternative Facts: BERKELEY – In a long recent Vox essay outlining my thinking about US President Donald Trump’s emerging trade policy, I pointed out that a “bad” trade deal such as the North American Free Trade Agreement is responsible for only a vanishingly small fraction of lost US manufacturing jobs over the past 30 years. Just 0.1 percentage points of the 21.4 percentage-point decline in the employment share of manufacturing during this period is attributable to NAFTA, enacted in December 1993.

A half-century ago, the US economy supplied an abundance of manufacturing jobs to a workforce that was well equipped to fill them. Those opportunities have dried up. This is a significant problem: a BIGLY problem. But anyone who claims that the collapse of US manufacturing employment resulted from “bad” trade deals like NAFTA is playing the fool. Read MOAR at Project Syndicate

NAFTA and Other Trade Deals Have Not Gutted American Manufacturing—Period: Live at Vox.com

Posted on by Brad DeLong
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Live at Vox.com: NAFTA and Other Trade Deals Have Not Gutted American Manufacturing—Period: Politically speaking, there was no debate on United States international trade agreements in 2016: All politicians seeking to win a national election, or even to create a party-spanning political coalition, agree that our trade agreements are bad things…. From the left… Bernie Sanders…. From the right—I do not think it’s wrong but it’s not quite correct to call it “right,” at least not as Americans have hitherto understood what “right” is—but from somewhere… now-President Donald Trump…. From the center establishment… popular vote–winning (but Electoral College–losing)… Hillary Rodham Clinton…. “I will stop any trade deal that kills jobs or holds down wages, including the Trans-Pacific Partnership. I oppose it now, I’ll oppose it after the election, and I’ll oppose it as president.…” The rhetoric of all three candidates resonates with the criticism of trade agreements that we heard way back when NAFTA was on the table as a proposal—not, as today, something to blame all our current economic woes on… Read MOAR at http://vox.com

This piece actually does only a third of what I wanted to do:

  1. Lay out how our trade agreements have not decimated manufacturing.
  2. Lay out what a properly-nurturing macroeconomic and industrial policy to increase the health of our important and valuable communities of engineering practice would be–but stress that such policies would not bring back mass manufacturing jobs.
  3. Account for the political mishegas.

But I only got through (1). And it is 8000 words. And I had to drop the extended notes and digressions that will go into the bibliographic essay…

Must-Read: Kevin Drum: NAFTA and China Aren’t Responsible for Our Steel Woes

Posted on by Brad DeLong

Must-Read: Kevin Drum: NAFTA and China Aren’t Responsible for Our Steel Woes: “Donald Trump stood in front of a pile of scrap metal yesterday in Pittsburgh and blasted both NAFTA and the accession of China into the World Trade Organization…

…He was positively poetic about how his trade policies would affect the steel industry…. There’s no question that the American steel industry has suffered over the past three decades, thanks to cheap steel imports from other countries. But this began in the 1980s and had almost nothing to do with either NAFTA or China…. Do you see a sudden slump in US steel production after NAFTA passed? Or after China entered the WTO? Nope…. It started with Japan and South Korea in the ’80s and later migrated to other countries not because of trade agreements, but because Japan and South Korea got too expensive. And it’s not as if no one noticed this was happening. Ronald Reagan tried tariffs on steel and they didn’t work. George H.W. Bush tried tariffs again. They didn’t work. George W. Bush tried tariffs a third time. No dice.

For all his bluster, when it came time for Trump to lay out his plan to ‘bring back our jobs,’ it was surprisingly lame. It was seven points long but basically amounted to withdrawing from the TPP and getting tough on trade cheaters. This would accomplish next to nothing…. The bottom line is simple: If we want access to markets overseas, we have to give them access to our markets. Donald Trump… [could be] promising to build a huge tariff wall around the entire country. He’s not willing to do that because even he knows it would trash the US economy. So instead he blusters and proposes a toothless plan. Sad.