You can find studies that either prove or disprove NAFTA’s success depending on how you measure, so I guess it is hard to tell who to believe. I’m not intimately familiar with all the details of NAFTA, so I can’t say if its all good. It certainly is possible that parts of it need to be reworked, but overall, in the fact that it promotes free trade, I think its good for the economy.
The people NAFTA hurts the most are those whose jobs move, people who don’t have the means (in terms of skills) to pursue other opportunities. This seems to be a big issue in the upcoming election. I’m hoping that the candidates will focus more on job training, and enabling these people to pursue other opportunities rather than just trying to keep existing jobs here through protectionism (import tarrifs, restrictions, etc).
I think Democratic economic policies typically sound really good, especially to the lower and lower-middle-class, but these policies often fail to analyze what happens after stage one. For example, Increasing minimum wage works for a while, until the market adjusts and unemployment goes up as a result. So I’m worried that while amending NAFTA or resisting free trade may help the US in the short run it doesn’t really think beyond stage one. (Republican policies are no better for the opposite reason, they usually completely fail to account for the effect such agreements have on the lower to lower-middles)
An appropriate analogy is the US music industry. It has failed to respond to the economics of new technology which has created a whole new distribution model it initially tried to ignore. It has attempted to fix this problem through litigation, but as it is beginning to see, legal manuvering can only work for so long. The forces of the market dictate change, and ultimately ignoring those forces will lead to the deaths of those companies who fail to evolve with changing technology and a changing market economy. Same can be said for the US economy as a whole in the context of globalization. We can ignore the forces of change or try to limit them with tarrifs and other protectionist measures. We can “save American jobs”, but in the end I think we’ll be worse for it.
I really think we should focus on helping those who are displaced by free trade move up and take advantage of the opportunities that are created by the more efficient economy that these policies provide. Whether the best way to do this is job training programs or something else I don’t know, but that is what we, as a country, should be trying to figure out.
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