NAFTA Trade Deficit and Employment

NAFTA is a terrible agreement, with a legacy of weakening lower socioeconomic class communities and decreasing national sovereignty for the hegemony of transnational corporations. Contrary to the propaganda, NAFTA overall doesn’t fit the criteria for a free trade agreement either. The increase in the lengths of patents and copyrights for corporations are protectionism — the opposite of free trade.


As can be seen, there is relatively little change, apart from cyclical ups or downs, in manufacturing jobs from 1970 until the late 1990s. Employment then plunges in the first half of the 2000s (before the Great Recession) due to the explosion of the trade deficit. This job loss was due to trade, but George Will and other supporters of U.S. trade policy think they have to lie to people and deny this fact.

While the trade deficit has declined somewhat in more recent years due to the drop in the value of the dollar, it is still near 3 percent of GDP (around $540 billion a year). The idea that it would not create more manufacturing jobs if we had more nearly balanced trade is absurd on its face (i.e. we could produce another $500 billion in manufactured goods every year without employing more workers), but apparently folks like George Will and the Washington Post editors want us to believe it.

Since we’re on the topic of lying to promote trade deals designed to redistribute upward let’s again note the famous 2007 Washington Post editorial touting NAFTA that told readers:

“Mexico’s gross domestic product, now more than $875 billion, has more than quadrupled since 1987.”

According to the IMF, Mexico’s GDP grew by 83 percent over this period, which is pretty far from quadrupling. Honest newspapers correct their mistakes, but as the slogan at the Washington Post says, “lies in the service of giving more money to rich people are no vice.”