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February 29, 2008 - 8:33am.
Folks, as I've been saying, trade deals like NAFTA are NOT the primary reasons why manufacturing jobs are disappearing at an ever-increasing rate in our country. The REAL reason has far more to do with the manufacturing sector of our economy becoming more innovative and automated. In fact, rather than falling, our output of manufactured goods in the United States has actually gone UP by some 66% since the NAFTA accord was inked. That work is simply now being done with fewer and fewer people. An excellent article by Adrienne Lewis in today's USA Today tells the real story:
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Keith as someone who lived
Submitted by pollchecker on February 29, 2008 - 8:52am.Keith as someone who lived in Mexico for a brief period of time, I have a unique perspective on NAFTA.
I agree with you that NAFTA wasn't the prime cause for losing mfg jobs. Actually, it is the tax code that is pushing corporations to move operations overseas.
The tax code provides for tax free income on products produced outside the country.
Very few jobs left the country to go to Mexico or Canada. But here is the flaw with Nafta.
Nafta opened up our economy to all kinds of products produced in Mexico and Canada. But apparently in Mexico, our products are not being sold the the public.
When I went to shop at WAlmart and Costco, there were so many products, I could not buy. Why not?
Mexico does not want to sell products that compete with those they already produce. They don't mind us selling American products where there is no competition. But if it is being produced in MX then they don't want to sell it.
Well, I can tell you for a fact, there are a lot of products here that you can't get in Mexico. Why not? Why is Nafta working for the other countries in this respect but not the other way around.
With a huge trade deficit, I would think American manufacturers would be licking their chops for new markets outside the US. Apparently they're not. So in this respect, Nafta is not working for us.
I, too, have spent some time
Submitted by keith on February 29, 2008 - 11:49am.I, too, have spent some time in Mexico. But, fortunately or fortunately, I did not encounter the situations that you mention.
I do know that, at least from the Canadian perspective, and with our two country's dollars now nearly at near par, there are a LOT of products made in the USA that Canadians are now buying at stores here and then taking back across the border to Canada. In that sense, our falling dollar HAS been good for at least this segment of our economy.
Nearly 90% of Canadians live within 100 miles of the US border. And, just before Christmas this last year, when the Canadian dollar was trading at upwards of $1.10 to its US counterpart, I know from personal experience that our northern borders were JAMMED with Canadian shoppers buying all manner of US goods, much to the determent of Canadian retailers.
And, because of the often HUGE retail price differential between identical goods sold in Canada and the US (particularly for larger home appliances and items like TVs and stereos) it is usually far more cost effective for Canadians to pay for the gas to drive across the US border, buy these items over here, and then pay the Canadian sales taxes (upwards of 14%) when they cross back into Canada than it is for them to buy these items "at home".
Such glaring price differentials came to my attention when I bought a can of spray paint in a Wal Mart store in Canada a few months ago for $1.99 plus 14% tax. I later found that EXACT same can of spray paint selling in a Wal Mart store in the USA for $.99. That is a 100% markup. And the ONLY difference between the two cans of paint was that the Canadian can was labeled in two languages (English and French). Otherwise, they were absolutely identical. In fact, it is such obscene markups that many Canadians pay for identical goods that is really ticking many of them off right now.
The horrifically high prices Canadians pay in Canada for such things as new automobiles is a particular gripe. Sometimes, Canadian prices can run upwards of $10,000 or $20,000 more for the EXACT same make and model vehicle that can be had in the States for a fraction of the cost of an identical Canadian-purchased vehicle. Right now, there have been several lawsuits filed against auto manufacturers and dealerships on both sides of the US/Canadian border trying to address these huge price differentials on identically equipped vehicles, particularly now that our dollars are virtually at par.
And while Canadians have always been able to purchase and "convert" US-marketed vehicles for Canadian use, up to now there has been very little economic incentive for them to do so. What's more, mechanically and safety-wise, there is really very little difference between vehicles sold in the USA and vehicles sold in Canada. Conversion of a US marketed vehicle to Canadian standards usually involves only minor re-wiring to make the headlights stay on all the time, and some dual language (English/French) placarding to meet Canadian safety laws.
But, other than these very minor differences, vehicles destined for the North American market are ALL designed and manufactured from day one to meet both US and Canadian (Mexico's, too?) emission and safety standards.
So, now that US vehicles are far cheaper for Canadians to purchase there than at home, the PROBLEM has been getting Canadian DEALERS to honor new vehicle warranties for vehicles purchased in the USA (and vice versa). Clearly, Canadian dealers are trying to protect their (once assured but now higher priced) market. However, THAT issue has now formed the principal reason for a number of lawsuits on both sides of the border...lawsuits that usually cite NAFTA as the underlying basis for the complaint as such practices constitute a restraint of free trade under the treaty.
But, even WITH most Canadian dealers' steadfast refusal to honor US warranties, the HUGE price savings Canadians now get by buying their vehicles in the USA (vice Canada) have nonetheless created a whole new "auto import" business north of the border. This applies for both new and used vehicles coming out of the USA. And, of course, such activity greatly benefits US dealerships, particularly those along our norther border with Canada.
The bottom line here is that, all along our northern border, cross border shopping from our Canadian friends (a country with some 34 Million people in it at last count) has created a HUGE (but yet I believe largely unmentioned) job market for US workers...particularly for those with customer service, retail, and import/export skills...that simply weren't there before NAFTA.
But, once again, we never seem hear about these "good" things that NAFTA has done for our country...only the bad.