On the O’Reilly Factor last night, and many times in the past, Donald Trump described NAFTA as a “disaster.” O’Reilly was asking some softball questions about whether Trump respected various Presidents when he asked about Clinton. The first thing that came to Trump’s mind was NAFTA. Check the 15:00 mark in the following video:
“NAFTA is a disaster and the more you see with NAFTA it was his baby more than anybody else. The more you see of NAFTA,what they’ve done, what it’s done to this country. And this is really belated, because at the time I guess people thought it was a good thing. But NAFTA has just stripped our country of, of, of everything. It’s taken so many companies out of and jobs out of our system.”
Clearly NAFTA did not strip our country of everything, but one can chalk that comment up to Trump’s usual hyperbole. Now that the US is more than two decades out from NAFTA, is it a “disaster”?
According to the Council on Foreign Relations, NAFTA’s impact was “fairly small.” The CFR sites a growing relation with Mexico that would have continued with or without the trade deal, and “dwarfs the effect” of the deal itself. The “direct effect of NAFTA on U.S.-Mexico trade is fairly small, and thus the direct impact on the U.S. labor market is also small”. They go on to say that the effect on the economies of Canada, the US and Mexico was small and positive. The best result for the US seems to be the increase in supply chains to Mexico, allowing US companies to get their products into Mexico more easily.
That’s all fine and good, but the hot button issue that has made NAFTA a conservative whipping boy for 20 years is jobs, jobs, jobs. What were the effects on US jobs?
No one seems to agree. Estimates on the jobs lost range from 350,000 to one million jobs, mostly manufacturing, but it is unclear whether those jobs were leaving anyway. NAFTA came at a time that the US manufacturing sector was already rapidly globalizing, and it is impossible to measure what effect NAFTA had on that shift.
Estimates for the amount of jobs that Mexico gained range up to 1.5 million jobs. It would seem that a man like Trump that is so violently opposed to illegal immigration from Mexico would welcome a 2:1 trade of jobs to Mexico, to the reduce the incentive for them to come here. As CBS News so aptly stated, with immigration you can use a carrot or a stick. NAFTA is a carrot, a small carrot as it turns out, but Trump prefers to use a big stick.