"NAFTA FACTS": FIRST NAFTA RESULTS SHOW JOB LOSSES FOR AMERICANS
THE OFFICIAL NUMBERS DON'T ADD UP
The public has recently been misinformed by the Department
of Commerce and media reports that distort the facts. The
official Department of Commerce trade data for the first six
months of NAFTA reveal a net loss of more than 21,000 jobs for
American workers, and not their bogus claim of a 100,000 net job
gain in their six month report on NAFTA (released August 18,
1994), NAFTA Facts: Summary of Trade Trends Under NAFTA:
January-June, 1994.
The major daily newspapers never bothered to check the
Department's own numbers and arithmetic. They uncritically
accepted and promulgated these new "Nafta Facts". Included among
them were: The Los Angeles Times, "NAFTA--Glad We Met Ya", Aug.
20,1994 (lead editorial); the Washington Post, two articles by
Hobart Rowen and Peter Behr, Aug. 21, 1994; and a Wall Street
Journal article by Patrick Lucey, ambassador to Mexico, Aug.
30,1994.
If you perform the proper calculations from the data in the
Department of Commerce report, you will see that the U.S. balance
of trade deficit with our NAFTA partners in the first six months
of 1994 worsened by about $1.1 billion. That is to say that
growth in our imports from NAFTA partners out-paced growth in our
exports to them by $1.1 billion. How 100,000 new jobs were
created by a worsening balance of trade deficit is a mystery not
explained by the Commerce Department or by the press. The reason
is that they simply got it wrong.
The "trade-employment multiplier" calculated by pro-NAFTA
economist Gary Hufbauer and Jeffery Schott is 19,600 American
jobs (increase or decrease) for each $1 billion change (increase
or decrease) in the balance of trade with our NAFTA trading
partners. Thus, the deterioration in the U.S. trade balance with
Mexico and Canada of $1.1 billion during the first six months of
the agreement resulted in the loss of 21,560 jobs.
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U.S.NAFTA Balance of Trade Summary
Jan-June, 1993 vs. Jan-June, 1994
($ Billions)
United States 1993 1994 Change
Exports to Canada 50.8 55.6 4.8
Exports to Mexico 20.9 24.5 3.6
Exports to NAFTA 71.7 80.1 8.4
Imports from Canada 55.9 61.4 5.5
Imports from Mexico 19.4 23.4 4.0
Imports from NAFTA 75.3 84.8 9.5
Balance of Trade -3.6 -4.7 -1.1
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Source: "Summary of Trade Trends Under NAFTA: Jan.-Jun.,
1994", U.S. Department of Commerce, 8/18/94.
On October 28, 1994, The Wall Street Journal published a
twelve page review of NAFTA. The section included two articles
of interest, one by NAFTA's renowned econometrician Hufbauer who
was curiously silent about the Commerce 100,000 job gain and
another by Jeff Faux, a NAFTA opponent, who correctly reported a
net loss of more than 20,000 American jobs.
Had the Department of Commerce, the press, and pro-NAFTA
"economists" properly fulfilled their civic and professional
duties, their headlines would have read, "First NAFTA Results
Show Job Losses for Americans." It appears that we are a long
way from the promised 170,000 new jobs to be created by NAFTA by
1995. Already, we can hear the "sucking sound" (Ross Perot).
