Well, not exactly. It was 20 years ago as of Jan 1, 2014, that NAFTA went into effect, superseding the Canada-United States Free Trade Agreement between Canada and the United States. The year was 1994, Bill Clinton was in office, having just edged out Ross Perot and President George Bush. Normally Democrats at that time, would not have supported such a broad, comprehensive trade treaty, but Bill Clinton was trying to be something of a New Democrat and he had the support of most Republicans. As I recall the treaty required the support of the Republicans in the House (they were not yet the majority), because there were not enough Democrat votes to pass the legislation.
The history of the passing of the treaty is an interesting look at the politics of the time. Ross Perot had run a somewhat erratic campaign in 1992 as an anti free trade candidate, among others things, and wound up with around 20% of the popular vote. In the run-up to NAFTA he had a historic debate with then Vice President Al Gore on the Larry King show, lasting the whole show. Though future events have shown to many that Ross Perot had a better idea of some of the bad effects of free trade on the United States than most including Al Gore, on that night, Al Gore owned the stage. After that debate Ross Perot pretty much ceased to be a major force on the national scene. I always felt, that even though the majority of Americans were not enthusiastic about the treaty, that debate tipped the scale towards the supporters.
At that time I was programming at a small firm in New Jersey, working with mainframes, and Unix. The programming community had an air of optimism, an air of expectancy. Even though the industry was in flux, and many of us were downsized frequently, we always managed to land on our feet, typically with a more suitable spot. The marketplace, at least for the IT community, was working.
There was also the fact that if NAFTA did not go through, it would have had a very negative effect on US, Mexican relations. The US negotiators had not really involved all segments of American society, and Mexico felt it would have in effect been dissed, quite badly, if the treaty fell through.
Also there was the fact that the Mexican economy was such a small percentage of the US economy that most people did not think the negative effects, if there were any, could be that great.
For that reason, I would say, most in the IT community, and most people in industries that were doing well, and were still on a end-of-the-cold-war high, were either indifferent, or modestly supportive of NAFTA.
The labor unions were the most opposed but with a Democrat President behind the push, they had an uphill battle, and lost.
That was of course, years ago, before the full effects of globalization hit the US, leaving us short of millions of jobs and having a very depressing effect on wages for the bottom half of the economic ladder. While I don’t think NAFTA is at all the primary reason behind this in terms of trade agreements, later trade agreements, had a much more profound effect, and NAFTA definitely started the process in motion.
Labor leaders and some Congressional Democrats tried to point out that capital is mobile and can move by touching a keyboard, and labor is static and cannot move as easily, and that true free trade requires trading partners that are at relatively equal levels in terms of their economic ranking, but as long as bubbles could be maintained in the stock and real estate markets, most people were not paying attention; and even though many were negatively affected their voices were not organized and they were no match for the “free trade” advocates. As a result the trade agreements were written largely by the Multinational companies who easily have been the biggest beneficiaries of these treaties.
In many ways our trade agreements are merely ways to circumvent our labor, safety and environmental laws, some of which have taken decades and decades to pass. We have become a nation of scofflaws, willing or not. And NAFTA started that process.
For a more detailed look at NAFTA check out:
NAFTA At 20: 1 Million Lost Jobs, 580% Increase In Trade Deficit
Once again a trade treaty, TPP, the Trans Pacific Partnership, is being created largely by the Multinationals under the auspices of “free trade”, without any participation by labor representatives, environmentists, consumer advocates, or just about any other of the real stake holders. And this trade agreement dwarfs not just NAFTA, but some experts say, even the existing GATT, and other globalist agreements.
On this blog I am trying to offer my perspective on some of the main issues confronting American I have worked in IT for many years, while all these events were taking place. I remember well programming on the Apple IIe microcomputer when it first came out, working at a small company right here in Rockland County, New York. It was an exciting time! And as Apple increased its sales, many, many thousands of jobs were created, right here in the gold old USA. Now with the same increase of sales in Ipads, due to these trade agreements, the same number of jobs is not being created in the United States. Jobs are being created, but not in the United States and the return is going to capital and not labor. This is one of the big reasons behind the lack of jobs and income inequality. It now takes a lot more capital returns to create the same amount of jobs as it did before these trade agreements. In other words, the Dow Jones may have to go up to twenty or thirty thousand points to create enough jobs in America to solve the jobs crisis.
The jobs are being created you see; but not in the United States, that is our bottom line. The difference in the expense is accruing to capital and not labor, or the environment or the consumer.
From the economic base that produced the IIe to the current economic base producing the IPad – let’s face it; Ross Perot may have run an erratic campaign, but he was on to something.