Senate Republicans yesterday vowed to block any potential nominees for Commerce Secretary or other trade posts until the White House moves ahead with free trade agreements with South Korea, Colombia, and Panama. But Republicans need look back only to the North American Free Trade Agreement (NAFTA) of the ’90s to see the potential downsides to these types of deals.
One of NAFTA’s biggest promoters, former House Speaker Newt Gingrich, appeared on the Howie Carr radio show yesterday evening and was asked about the watershed trade pact between the U.S., Mexico, and Canada he helped create. Responding to a caller who asserted that NAFTA killed American jobs, Gingrich didn’t disagree, but retorted by touting the fact that NAFTA had created jobs “close to the United States” in Mexico:
CALLER: Back in the ’90s I remember Ross Perot saying that there was going to be the giant sucking sound of jobs if NAFTA passed. I think it ended up being true, right? And I know you were a big free trader.
GINGRICH: Yeah, well, I don’t think it was true in Mexico. I think the fact is that NAFTA allowed us to build jobs in Canada, the United States, and Mexico, in competition with China. I mean, our big competitor is not Mexico. Our big competitor is China and India. And I’d rather have jobs close to the United States than have jobs overseas in places like China and India. That’s why I was in favor of it. … So in a sense, I’d like our neighborhood to be fairly well off and fairly prosperous.
Of course, critics of NAFTA worried about precisely what Gingrich points to as a success — jobs being created in Mexico and Canada instead of the U.S. While there were many benefits to the American economy from enacting the pact, there is no question that NAFTA pushed low-skilled American jobs out of the U.S. to Mexico. “All 50 states and the District of Columbia have experienced a net loss of jobs under NAFTA,” especially in the manufacturing and agriculture sectors, according to a study from the Economic Policy institute. “[O]ver a million jobs that would otherwise have been created were lost, and wages were pressured downward for a large number of workers with less than a college education.”
And Gingrich himself promised NAFTA would help create American jobs, telling Congress after being re-elected Speaker that the treaty would help the U.S. “focus on increasing American jobs through world sales.” It’s not like Gingrich wasn’t warned about what NAFTA would do to American manufacturing. Robert Reischauer, then the director of the Congressional Budget Office, warned in 1993 that while the deal would create jobs for educated Americans, the gains “will all largely be invisible.” “But when the glass factory in Toledo closes or the textile plant in South Carolina or the furniture manufacturer in North Carolina because those low-wage jobs move to Mexico, it will be highly visible, and it will be attributable to Nafta,” he said.