More Spurious Claims About NAFTA

By March 20, 2008Trade

An article in the March 14th edition of Manufacturing & Technology News, entitled USTR’s U.S. Production Claim Riles Union Boss Leo Gerard (not online), caught my eye. Evidently, the Office of the U.S. Trade Representative’s recent fact sheet on NAFTA (the North American Free Trade Agreement) upset the president of the United Steelworkers.

In the fact sheet, the USTR states: “Myth No. 3: NAFTA has hurt America’s manufacturing. Fact: U.S. manufacturing output rose by 58 percent between 1993 and 2006, as compared to 42 percent between 1980 and 1993”

In the article, Gerard’s printed response to this claim is “Can you print ‘bullsh@$’? This is just pure bullsh@$. I am fed up with that crap,” Gerard goes on to say that “We’re not producing more steel. We’re not producing more glass. We’re not producing more cement. We’re not producing more tires. We’re not producing more of these either as a percentage of the economy or in real terms, and I can tell you that unequivocally.”

Later in the article, Lori Wallach, director of Public Citizens Global Trade Watch is said to have looked at the USTR fact sheet, and says “trick number one” is that it is not in inflation-controlled dollars: “When you control for inflation, you cut the growth by 40 percent. That’s a math trick.”

Well, someone better tell Ms. Wallach to look again. The statistics that the USTR bases its fact sheet on ARE ADJUSTED FOR INFLATION.

According to the Bureau of Economic Analysis, which is part of the Commerce Department, after adjusting for inflation (i.e. changes in prices) real manufacturing output rose by 58 percent between 1993 and 2006. This is more than a third faster than the 42 percent rise during the 1980-1993 time frame. Why Ms. Wallach is cited as an expert on statistics is beyond me.

And what about Mr.Gerard’s claim that we are not producing more steel, glass, cement or tires.
U.S. manufacturers aren’t producing more of these products? Really? In fact, according to Federal Reserve’s industrial production statistics, output of all of these products has actually increased since the NAFTA agreement was signed.

Since 1993, glass production is up 15 percent; iron and steel production is up 19 percent; cement production is up 52 percent; and tire production is up 2 percent. With the exception of tire production, each of these sectors has outpaced the performance during the 1980-1993 period.

This article clearly lifts the adage “Never let the facts get in the way of a good story” to a new level of absurdity.

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