CAFTA: The Jobs Killer Canard

By January 11, 2008Policy Experts, Trade

It’s official. With the trade data just released today by the U.S. Department of Commerce, the U.S. trade balance in manufactured goods with CAFTA (Central American and Dominican Republic Free Trade Agreement), has registered a $2 billion trade surplus. This is a sharp reversal from the pre-CAFTA situation, where in the years before the passage of the CAFTA agreement we averaged an annual manufactured goods trade deficit of about -$1.5 billion.

cafta.jpgThis agreement is the one that isolationist organizations have called “the job killer.” Just before the Congressional vote on CAFTA, one of these groups pronounced, “Like NAFTA, CAFTA is just another outsourcing agreement that will devastate U.S. manufacturing…CAFTA is a continuation of the failed NAFTA policy that drives our rising trade deficit and mounting job losses.”

This was always a silly statement, because the CAFTA countries already had one-way free trade into the U.S. market. The big deal in CAFTA was that in exchange for making their access to the U.S. market permanent, they would eliminate their trade barriers to Made-in-the-USA products. How we could lose in such a deal is beyond me.

Now the facts are in, showing that logic once again prevails over mythology. Far from being a “job killer,” CAFTA has been a real plus for the United States – as has NAFTA, another trade agreement for which these isolationist organizations have been unable to read the trade statistics.

American manufacturing faces some real problems – but CAFTA and other trade agreements are not among them. It would be nice if these anti-trade groups would ‘fess up and acknowledge they were dead wrong, but that probably is too much to hope for.
Congressional Representatives and Senators are besieged by lobbyists advocating various positions on trade. I hope that our elected representatives will start demanding of all lobbyists, “show me the data.” The NAM would be happy to comply.

Frank Vargo is Vice President for International Economic Affairs of the National Association of Manufacturers.

Join the discussion 6 Comments

  • john b says:

    …Frank is not pointing out thorough, complete, hard facts; he is spinning like a top..he is trying to convince the majority of Americans that, although they have lost their jobs, are experiencing a lowered standard of living, and are struggling, that the current free trade policy has somehow been a benefit to them….at this point in time his only hope is to try and create some doubt in the minds of the masses..frankly, it’s too late..the vast majority of the American people are united in their disdain for the current trade policy..it’s been horrible for them..I think the problem may be Frank’s salary is paid for by the multinational corporations that have the power at NAM…again, a very difficult,VERY hard sell..the trade policy of this country has been a complete and utter failure…hey, got to hand it to Frank though..he is a good company man..he’s been a good, loyal soldier to his bosses, the multinationals..

  • Carter says:

    Since when is pointing out facts a “hard sell?”

  • John B says:

    all readers should try to contact Commerce OTEXA and try to confirm Frank’s information..for instance, when we ship components, originally assembled in the US, to CAFTA countries to be processed and shipped back to the US and elsewhere, how is this classified..? if we cut garment pieces here and ship to the CAFTA countries to assemble,thus eliminating sewing jobs here,how is this classified? …amazing..by a very, very large majority America has spoken..even 60% of voting Republicans have said the current policy has been bad for America yet NAM continues their crusade to eliminate American jobs in favor of the race to the bottom….I think NAM may have a lot of multinational corporations as high paying members..? what do you think? makes sense, right?

  • John B says:

    ..why does NAM continue with the hard sell..? it may lead to readers assuming that NAM’s power in membership comes from multinational corporate interests that couldn’t care less about what happens to America..why in the world would they want to take such a risk? ..working, middle class Americans are feeling the pain inflicted by unfair, illegal trade; it is VERY real…NAM is embarassing themselves by thinking the American people are so stupid as to actually believe their rhetoric..give it up Frank..that ship has sailed..

  • Joe Dragon says:

    Come on now, if you are going ot spout NAFTA rhetoric you need to throw some figures behind it. You remember the little $600 billion miscalculation.

    2007-The U.S. trade deficit with Mexico was $64.3 billion.

    http://www.mbginfosvcs.com/pdfs/mxhuf-sh.pdf

    “Our job projections reflect a judgment that, with Nafta, U.S. exports
    to Mexico will continue to outstrip Mexican exports to the United
    States, leading to a U.S. trade surplus with Mexico of about $7 billion
    to $9 billion annually by 1995” ..rising to $9 billion to $12 billion
    between the years 2000 and 2010.

  • John bello says:

    So, using the same logic, what you are saying that NAFTA and our overall trade policy is an enormous failure or enourmous success? We have huge, record setting deficits with both Mexico and Canada..with china our deficit will exceed $265billion this year.. I don’t understand your point..are you saying our overall tradde policy is a jon killer..? can’t have it both ways….we will run a $710Billion trade deficit this year..are you saying we are doomed?..your article makes no sense..can you please explain?

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