NAFTA not to blame for manufacturing woes, say representatives of Canada, Mexico

Government representatives from Canada and Mexico are pushing back against the idea that NAFTA is responsible for the loss of manufacturing jobs in the United States.

“Despite all that you’ve heard to the contrary, here’s the truth about NAFTA: NAFTA has been an unvarnished, if unloved, success,” said Consul General John Cruickshank, head of the Canadian consulate in Chicago.

He joined Consul Julian Adem, who leads the consulate of Mexico in Milwaukee, for a conversation on NAFTA as part of a recent WisPolitics luncheon held in Madison.

This discussion came in the midst of ongoing negotiations to revamp NAFTA, a trade deal which has been in place for over a quarter-century. The third round of negotiations began Saturday, with representatives from all three countries meeting in Ottawa.

“With respect, I think people are negative about NAFTA not because of what it did — because on the whole, that’s pretty positive for everybody — but frankly for what it didn’t do,” Cruickshank said. “And that is, it didn’t cushion all the negative effects of globalization on America.”

Adem argued to the same effect, calling the idea of the United States losing jobs because of NAFTA “a myth.”

“This is part of a global tendency; it would have happened probably without NAFTA also,” Adem said. “What I’m saying is that there are tendencies as the current economic system we’re living in develops which lead to shifts in the way people live and relate to one another, so that the old scheme… is no longer applicable.”

Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce, spoke on the importance of trade between Mexico, Canada and Wisconsin. He said 46 percent of Wisconsin exports go to either Canada or Mexico, and the balance of trade is in Wisconsin’s favor.

“If you look at it globally, it’s very clear that Wisconsin needs to be engaged,” Bauer said. “I always tell our members, they’ve got to export or they’re going to perish, because frankly, there just isn’t enough market share within the United States for us to close our borders and hope to thrive.”

Cruickshank pointed to a handful of American economic woes that were not dealt with by NAFTA, like China’s rising status as an economic superpower and the United States’ trade deficits with China, Japan and Germany.

“It didn’t alter the change of leverage between capital and labor that globalization of trade created, and it didn’t inoculate American manufacturing workers against their own companies’ investments in productivity — and no amount of NAFTA renegotiations is going to change any of those facts,” Cruickshank said.

“Some people lost their jobs… yes,” Adem said. “That’s why you have to re-certify yourself, you have to look for new opportunities and move forward in life.”

Mexico is currently an attractive place for auto manufacturers because of the low price of labor there, but Adem said the country is already grappling with how it will move forward once things inevitably change.

“Even Mexico by 2030 or 2035 is going to lose most of its jobs in the automobile sector — we know that,” Adem said. “We have to re-certify those workers in something else.”

Cruickshank and Adem both testified to the positive benefits of the NAFTA agreement for all three participating countries, as well as for Wisconsin in particular.

Canada is the biggest export market for Wisconsin, and is bigger than the next four largest combined, Cruickshank said.

“We buy $6.6 billion in goods from Wisconsin every year,” Cruickshank said. “That’s trade that supports, directly and indirectly, almost 160,000 jobs in Wisconsin.”

And Wisconsin’s exports to Mexico have increased by over 900 percent under NAFTA, Adem said, adding that Mexico is Wisconsin’s second biggest export market, up from the seventh biggest in 1993.

“If that’s not a benefit for this state, then I don’t know what is,” Adem said.

–By Alex Moe