B402, Ok. You say "'Free Trade Agreements" opened the flood gates of corporate cost cutting." I wonder if in writing that you wondered when the first trade agreement was made. i don't know, so let's look:
A Brief History of International Trade Agreements By Matthew Johnston Updated August 27, 2021 Reviewed by Michael J Boyle Michael Boyle
Ever since Adam Smith extolled the virtues of the division of labor and David Ricardo explained the comparative advantage of trading with other nations, the modern world has become increasingly more economically integrated. International trade has expanded, and trade agreements have increased in complexity. While the trend over the last few hundred years has been toward greater openness and liberalized trade, the path has not always been straight. Since the inauguration of the General Agreement on Tariffs and Trade (GATT) .. https://www.investopedia.com/terms/g/gatt.asp[Note: signed 1947, by 23 countries], there has been a dual trend of increasing multilateral trade agreements, those between three or more nations, as well as more local, regional trade arrangements.
Investopedia / Sabrina Jiang
From Mercantilism to Multilateral Trade Liberalization
The doctrine of mercantilism dominated the trade policies of the major European powers for most of the sixteenth century through to the end of the 18th century. The key objective of trade, according to the mercantilists, was to obtain a “favorable” balance of trade, by which the value of one’s exports should exceed the value of one’s imports. https://www.investopedia.com/articles/investing/011916/brief-history-international-trade-agreements.asp
So yeah, your "'Free Trade Agreements" opened the flood gates of corporate cost cutting." would be spot on. Now you might be feeling i'm being silly by my last minute inclusion of the above, after all below was set. If so we would disagree on that.
Back to the present: At least you appear now to be accepting this latest all started with Reagan. NAFTA, we visited not long ago. There are obviously different opinions on the effects of that agreement. This to you Jan. 10:
NAFTA and other trade deals have not gutted American manufacturing — period By J. Bradford DeLong Jan 24, 2017, 8:10am EST [...] Trump and Sanders were apocalyptic in their discussions of trade, and then Clinton abandoned the truth, too [...] Adding up the effects of the much-maligned trade agreements The relative decline in employment in manufacturing since World War II is the biggest structural change, or evolution, to hit the American economy over the past half-century. Politicians, with their preference for truthiness over the facts, attribute roughly all the 22 percentage point decline since 1971 in the manufacturing employment share to NAFTA, to China's entry into the WTO, and to a few other scattered "corporately backed unfettered free trade agreements.” But — I really would like to drive this home — the worrisome part from trade is not the decline in the manufacturing job share from 30 percent to 12.2 percent, but the "excess" decline from 12.2 percent to 8.6 percent. That worrisome part of the decline of the manufacturing job share is, roughly, only one-sixth of the total decline: 3.6 percentage points. And the amount of decline attributable to the two big bad trade agreements is only one-tenth of that: 0.36 percentage points. P - In sum, we can attribute a mere one-tenth of the excess reduction relative to Germany in the manufacturing job share to NAFTA and to China joining the WTO. https://www.vox.com/the-big-idea/2017/1/24/14363148/trade-deals-nafta-wto-china-job-loss-trump
And, B402, noted you say "Then Clinton started to wave of work leaving America......." even almost immediately after you were given:
The White House is only telling you half of the sad story of what happened to American jobs [...]The problem didn't start in the 1990s, it started in the 1980s, when Ronald Reagan — a hero of the Trump administration — was president, and neoliberal economics were first making their mark on policy.
So the situation as i see it: You are set 100% satisfied with your bone. Me? This doggie will never be certain about such things as the NAFTA debate. Never certain. Always wondering who is right. Leaning of course. One certainty here seems is Jeff Faux (new to me) and Brad DeLong (fairly familiar) have some disagreements on the effects of NAFTA. So i searched and for now picked this one:
Was NAFTA a Disasta?: Wednesday Focus for July 30, 2014
I have been meaning to pick on the very sharp and public-spirited Jeff Faux since he wrote this seven months ago:
----- New Year’s Day, 2014, marks the 20th anniversary of the North American Free Trade Agreement (NAFTA). The Agreement created a common market for goods, services and investment capital with Canada and Mexico. And it opened the door through which American workers were shoved, unprepared, into a brutal global competition for jobs that has cut their living standards and is destroying their future. NAFTA’s birth was bi-partisan—conceived by Ronald Reagan, negotiated by George Bush I, and pushed through the US Congress by Bill Clinton in alliance with Congressional Republicans and corporate lobbyists….
NAFTA directly cost the United States a net loss of 700,000 jobs…. And the economic dislocation in Mexico increased the the flow of undocumented workers into the United States…. By any measure, NAFTA and its sequels has been a major contributor to the rising inequality of incomes and wealth that Barack Obama bemoans in his speeches…. The agreements traded away the interests of American workers in favor of the interests of American corporations…. NAFTA’s fundamental purpose was… to free multinational corporations from public regulation in the U.S., Mexico, Canada, and eventually all over the world…. The 20th anniversary of NAFTA stands as a grim reminder of how little our political leaders and TV talking heads—despite their crocodile tears over jobs and inequality—really care about the average American who must work for a living. -----
Let’s start with the numbers:
Graph U S Imports of Goods from Mexico Customs Basis FRED St Louis Fed
Back before NAFTA about 0.53 a cent of every dollar spent in the U.S. was spent on goods and services imported from Mexico. Today 1.6 cents of every dollar spent is so spent–a tripling. Some of this would have taken place anyway as containerization and all the other -izations that make up globalization took hold.
--- Insert: Now right or wrong here my thought on reading that was that you on reading that might say something like -- yeah, but NAFTA drove globalization -- to which i would likely think, not really, it was just another trade agreement. But i don't know so searched again and got:
TRADE: The Nafta Paradox By Harley Shaiken | Berkeley Review of Latin American Studies, Spring 2014 Download the PDF of this article (PDF file) · More on this event P - ...The key to integrating three very disparate economies was defining the rules of the game. Trade among complex economies is inherently managed trade — the final Nafta agreement approaches 1,200 pages of highly technical language — so the real question became: what was being managed and with what goals in mind?
What then has happened after 20 years under Nafta? The agreement encompasses many areas, from agriculture to banking, from safeguarding intellectual property rights to resolving investment disputes. The most profound changes took place in manufacturing trade between Mexico and the United States — Canada and the U.S. had already adopted a free trade agreement in 1987... That's all i've glanced at so far - https://clas.berkeley.edu/trade-nafta-paradox ---
U.S. trade as a whole is up by a factor of 1/2 as a share of total spending. So it is reasonable to think that in the absence of NAFTA we would have gone from spending roughly 1/2 a cent to spending 3/4 of a cent of every dollar spent in the U.S. on imports from Mexico. And the extra doubling–from roughly 3/4 of a cent to 1.6 cents–is the result of NAFTA. We can say that, roughly, in the absence of NAFTA the goods and services we import from Mexico would, if produced here at home, have employed 1.05 million people if monetary and fiscal policy were to remain the same as it is. And in the presence of NAFTA the goods and services we import from Mexico would, if produced here at home, have employed 2.1 million people if monetary and fiscal policy were to remain the same as it is. Thus the passing of NAFTA has caused us to increase the goods and services we import from Mexico by enough that the excess would employ 1.05 million people if produced here at home and if monetary and fiscal policy were to remain the same as it is.
But there are also our exports to Mexico–which have risen, again, from an amount equal to 0.8 for every dollar spent in the U.S. had we not passed NAFTA to 1.3 cents for every dollar–an increase large enough to employ at extra 0.7 million people if monetary and fiscal policy were to remain the same as it is. And we think that these 700,000 jobs are, on average, better jobs with higher pay than the 1.05 million jobs America does not have because of imports from Mexico. Why? Because if the jobs we have swapped in add less value-added than some of the jobs we have swapped out to Mexico, our businesses could make more money by unswapping them and also unswapping some of the jobs we have swapped out. Given that our businesses are neither stupid nor not-greedy, they would have done so. Job for job we would rather have the extra 700,000 jobs from making extra exports for Mexico than the equivalent number of jobs displaced by increasing our imports from Mexico.
Now it is the case that we do now have a trade gap vis-a-vis Mexico: while we spend 1.6 cents of every dollar on imports from Mexico, our exports to Mexico are only 4/5 as much. Mexicans are on net taking 1/5 of the dollars they earn by selling to America, and socking those dollars away in New York bank accounts and other U.S.-located investments. This does create a net cost to the U.S. from NAFTA if we believe that fiscal and monetary policy would remain the same in its absence.[To now, i don't' follow all that, so am taking his word for it.] The net cost to the U.S. of NAFTA, if we denominate it in jobs, is something less than 350,000 jobs–less by the amount that adjusts for the value of the amount by which NAFTA allows us to improve average job quality–if monetary and fiscal policy were to remain the same as it is. and that is a dicey assumption. (No, I don’t know why Jeff gets a net job cost number twice as large as I do: I think he has gotten the analysis wrong.)
In a world of 140,000,000 American jobs, 350,000 missing is 0.25%–and a very small number relative to the 7,000,000 job gap produced by the Lesser Depression, only 1/20. You want to talk about what is wrong with the American labor market, and you should spend 20 times as much time talking about the housing bubble, the financial crisis, the downturn of 2008-9, the slow jobless recovery–the whole mishegas that is the Lesser Depression–as about NAFTA.
And NAFTA has benefits. The same logic that leads us to think that the bilateral U.S. trade deficit from NAFTA has reduced employment in the U.S. by 350,000 leads us to think that it has boosted employment in Mexico by 1.5 million–that’s 3% of the Mexican labor force. Mexico’s unemployment rate is currently 5%. Would we really wish a world in which it were 8%?
I am of the faction that holds that if we are unhappy with the level of employment and of wages in the U.S., we should change our monetary, spending, taxing, banking, regulatory, and exchange rate policies to change them. Trade policy is a relatively weak tool to use for macroeconomic stabilization and income-distribution purposes. And we should compensate for what negative effects it has with our other policy levers.
But more important it is clear to me that NAFTA was a very big deal for the Mexican government and the Mexican economy, but it was a small deal for the U.S. economy. Other forces, factors, and trend swamp its influence on the U.S. Whether NAFTA was a good thing to do or not hinges well-nigh completely on what its effects were on Mexico. What does Jeff say? In sixteen paragraphs, what he does say is:
--- the lack of worker protections in NAFTA insured that corporate investors would reap most of the benefits [to Mexico]… ---
That is all.
Now you can make the argument that NAFTA was a net minus–that the (perhaps large) benefits to the plutocrats of Mexico and of those investing in Mexico plus the (perhaps small) benefits from higher demand for labor in Mexico were outweighed by the losses to U.S. workers. I think that argument is wrong. But Jeff doesn’t make it.
Now you canmake the argument that NAFTA strengthened fundamentally destructive neoliberal forces within Mexico in a way that has harmed Mexico in the long run. I think this argument is partly right–evidence: the eagerness with which the Mexican government was anxious to decrease urban poverty at the expense of increasing deep rural poverty by the early opening-up of the Mexican domestic market to corn from Iowa. Is it right enough to tip the balance? I waver back and forth on this from year to year. But right now I do not think it is right enough to outweigh the notional 3%-point decline in the Mexican unemployment rate. And Jeff doesn’t make it.
Now you can make the argument that the regime that negotiated NAFTA was fundamentally illegitimate–that Carlos Salinas de Gortari stole the presidential election in the late 1980s, and that the U.S. should have listened to the rightful president, NAFTA opponent Cuahtemoc Cardenas, and refused to negotiate. With this argument I have more sympathy, but in the end I come down on the side that in the circumstances of Mexico in the early 1990s democratization was aided rather than retarded by NAFTA. But Jeff doesn’t make it.
And you can make the argument–with which I agree–that the energy spent on NAFTA would have been much better spent on a more bottom-up program of domestic Mexican development focused on education and infrastructure, and that the willingness of the George H.W. Bush administration to negotiate NAFTA pulled Mexico into a development strategy that was definitely second-best. And I have come to agree with that argument. But I then do note that once NAFTA was negotiated for Clinton and the 1993 Congress to ratify it was plausibly better for the world than not ratifying it. And, anyway, Jeff doesn’t make it.
The argument that Jeff does make is a very U.S.-focused, anti-cosmopolitan argument. The seventeen words I quoted above are the only words in which anything outside the United States appears as anything other than a means to a U.S.-centric and a U.S.-focused analysis. And this, I think, is wrong.[Me too.]The U.S. was a global hyperpower of a relative strength never before seen in human history. The U.S. is still a ne plus ultra superpower of a relative magnitude exceeded only perhaps in the mid-nineteenth century when Britain was the only industrial nation and the sun never set on the British Empire. A hegemon of such a magnitude has a strong moral obligation to the world as a whole–and to its own long-run comfort and, indeed, survival once it ceases to be a hyperpower–to be cosmopolitan, and to look at the broad effects of its policies on the world outside its borders.
And there remains the question that puzzles me: The energy the American left poured and pours into the anti-NAFTA cause could have been devoted and could be devoted to issues of domestic political economy that are closer to even in the balance and that would have much bigger positive effects on the U.S. working class. So why the direction of energy to NAFTA? Why such a focus? And–if there is going to be such a focus–why such an anti-cosmopolitan focus?
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