Must-Read: Why do Bernie Sanders and Michigan fear NAFTA? I never understood the focus. I think, in retrospect, that there were better roads for Mexican development than the integration with the rest of North America that brought about Mexico's 1995 financial crisis and recession. But the argument that NAFTA was a big deal for U.S. income inequality never made sense to me. As far as inequality was concerned, NAFTA back in the early 1990s had at most 1% of the salience of health-care reform--yet American labor seemed to be spending 80% of its energy fighting NAFTA and only 20% on all other issues combined, and that pattern continues.
Here the very sharp Eduardo Porter points out that trade is, well, positive-sum:
: Nafta May Have Saved Many Autoworkers’ Jobs: "Nafta might have saved hundreds of thousands of jobs...
...By offering a low-wage platform, Mexican plants increased the scale of production in North America, allowing domestic and foreign automakers to amortize their large fixed costs. Carmakers and parts suppliers tend to cluster relatively close together. So assembly plants in Mexico help sustain a robust auto-parts industry across North America. The Honda CR-V assembled in El Salto, Jalisco, for example, uses an American-made motor and transmission. Roughly 70 percent of its content is either American or Canadian.... This regional integration gave the United States-based auto industry a competitive edge....
If the real concern is China--another target of Mr. Trump’s ire--a truly integrated North American market would help keep it at bay.
The auto industry remains a bright spot.... ‘Every auto manufacturer is setting up shop in Mexico,’ said Eugenio Sevilla-Sacasa, vice president for international supply chain operations and cross-border logistics at Ryder, whose trucks cross the border between Mexico and the United States 150,000 times a year. ‘Ford, G.M. and Chrysler but also Toyota, Mazda, Honda, Mercedes-Benz, Kia.’... ‘It’s exactly the wrong time to blow up Nafta,’ Professor Hanson argued...
http://www.nytimes.com/2016/03/30/business/economy/nafta-may-have-saved-many-autoworkers-jobs.html
