from epinet.org:
February 18, 2000
NAFTA imports lead growth in U.S. trade deficit
The U.S. Department of Commerce today reported that the
merchandise trade deficit rose 41% in 1999 to its highest level on
record. The aggregate U.S. trade deficit in goods hit $347 billion in
1999, an increase of $100 billion over 1998. The deficit reflects rapid
growth in imports from the NAFTA countries — Canada and Mexico —
as well as China, Japan, and Western Europe. The U.S. trade balance
with the rest of Latin America also deteriorated, while rising oil prices
increased the deficit with OPEC, the oil producing countries. U.S. trade
problems were compounded by a run-up in the value of the dollar, which
has gained 16% in real value since 1995, and by slow or negative
growth rates elsewhere in the world.
The broader goods and services deficit also increased in 1999 by
65% to $271 billion, another record high. U.S. goods and services
imports jumped 12%, while exports increased less than 3% last year.
U.S. imports grew nearly three times as rapidly as real GDP in 1999, as
exporters from around the world targeted U.S. markets.
U.S. trade deficits with the NAFTA countries increased 69% in
1999. Imports from Canada, which were led by motor vehicles and
parts, agricultural products, aircraft parts, and fuels, increased by $25
billion in 1999 alone. U.S. imports from Mexico, which increased by $15
billion in 1999, included motor vehicles/parts and a wide array of
electronic products, including televisions, computers, and
telecommunications equipment, which were primarily assembled
in the Maquiladora export-processing zones.
The U.S. deficits with China and Japan increased 21% and
16%, respectively, in 1999. These two countries were
responsible for 43% of the total U.S. trade deficit in 1999. The
U.S. trade deficit reflected a six-to-one ratio of imports to
exports — the most imbalanced relationship in the history of U.S.
trade. Japan has also maintained a persistent trade
deficit with the United States for several decades.
U.S. imports from Western Europe, the rest of Latin America, and
OPEC also grew rapidly last year. The trade deficit with Europe
increased by 61% in 1999, as a result of rapid import growth. Imports
from Latin America increased 16% in 1999, while exports to the region
suffered a sharp 13% decline as a result of the financial crisis that
spread from Brazil to many other countries in this region. Higher oil
prices explain only a small share of the growth in the U.S. trade deficit,
as the total bill for all petroleum imports, including those from OPEC,
increased by only $16.5 billion.
The manufacturing sector lost 341,000 jobs in 1999. These losses
continue a trend that began in March 1998. Job losses accelerated in
1999 because of the rapid growth of imports that competed with goods
produced by U.S. manufacturing industries. Among industrial products,
the trade deficit expanded most rapidly in 1999 in motor vehicles (an
increase in the deficit of $25 billion), computers and office machines
($7.7 billion), televisions and VCRs ($7.6 billion), and aircraft ($4.3
billion). The trade balance improved most rapidly in iron and steel mill
products, led by a decline of $4 billion in imports that resulted from the
imposition of anti-dumping duties and other restrictions on steel
products from a number of countries.
by Robert E. Scott
The Economic Policy Institute TRADE PICTURE is published upon the
release of year-end trade figures from the Commerce Department.
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here's the beginning of another piece:
NAFTA'S PAIN DEEPENS
Job destruction accelerates in 1999
with losses in every state
by Robert E. Scott
From the time the North American Free Trade Agreement (NAFTA) took
effect in 1994 through 1998, growth in the net export deficit with Mexico
and Canada has destroyed 440,172 American jobs (see Table 1).
Moreover, through the first half of 1999 the portion of the U.S. trade
deficit attributable to NAFTA has nearly doubled in comparison to the
same period last year, leading to even more job losses. . . .
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What about Mexico, you might ask. Here's some quotes from "The Failed Experiment: NAFTA After Three Years":
" . . . The 1995 peso crisis is commonly used to excuse the sharp deterioration of the U.S. trade balance with Mexico. However, NAFTA was the foundation for an aggressive export-led growth strategy in Mexico. This assumed that expanding Mexico’s exports would create jobs for Mexico’s rapidly expanding workforce and steadily increase living standards. The peso had to fall in order for this strategy to succeed. As Professor Robert Blecker of American University put it, “Mexico had to devalue the peso in order to attract the direct foreign investment and export-oriented manufacturing that the NAFTA agreement was designed to promote.” . . .
. . . The peso collapse has devastated Mexico’s economy. The number of unemployed workers doubled between mid-1993 and mid-1995, to nearly 1.7 million. Additionally, there were 2.7 million workers employed in precarious conditions in 1996. To make ends meet, many families are forced to send their children-as many as 10 million-to work, violating Mexico’s own child labor law. An estimated 28,000 small businesses in Mexico have been destroyed by competition with huge foreign multinationals and their Mexican partners. Real hourly wages in 1996 were 27% lower than in 1994 and 37% below 1980 levels. Of the 1995 working population of 33.6 million, 19% worked for less than the minimum wage, 66% lacked any benefits, and 30% worked fewer than 35 hours per week. During three years of NAFTA, the portion of Mexican citizens who are “extremely poor” has risen from 32 to 5 l%, and 8 million people have fallen from the middle class into poverty. . . . "
mbs