An Outcome of Free Trade

Since NAFTA was ratified, here are some of the results, as outlined by George Schultz, former Secretary of Labor, Treasury, and State; former OMB Director; currently Distinguished Fellow at Stanford University’s Hoover Institution—a guy who might know little about his subject matter.  As of 2010,

  • the three countries [the US, Canada, and Mexico] constitute around one-fourth of global GDP
  • they have become each other’s largest trading partners.

Moreover, the trade is tightly integrated:

  • 24.7% of imports from Canada were US value-added
  • 39.8% of US imports from Mexico were US value-added

The (legal) movement of people among the three of us has burgeoned, also, together with the economic benefits of such mobility.  Tourism:

  • Canadians made 21.3 million trips to the US in 2011 and spent $23.9 billion
  • US visitors made 11.6 million trips to Canada and spent $7.7 billion
  • Mexican visitors made 13.5 million trips to the US and spent $9.2 billion
  • US visitors made 20.1 million trips to Mexico and spent $9.3 billion.

Border-crossing truck shipping:

  • 10.7 million [border crossings] between the US and Canada
  • 9.5 million between the US and Mexico.

And so on.  There’s more concerning energy and energy independence both for NAFTA and for the three of us individually.

Of course some object to the loss of jobs.  But outside the results of the Panic of 2008*, the job losses were temporary for those truly interested in working.  They simply rotated into new jobs generated by the new opportunities flowing from the burgeoning (free) trade.  The increased trade, over all, led to a net increase in employment in each of the three of us.


*The results of the Panic, including the loss of job mobility, have naught to do with free trade or specific free trade agreements.  These outcomes stem directly from subsequent Federal policies aimed explicitly at the Panic and not at anything systemic in our economy.

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