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Ok fill me in, how has NAFTA had anything to do with outsourcing

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Ironpost Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:30 PM
Original message
Ok fill me in, how has NAFTA had anything to do with outsourcing
and the one sided trade with China? Mostly the only thing we export to China is raw materials. Thanks, I need some education here.
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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:39 PM
Response to Original message
1. We export jobs, it is our largest export
and of course the benefit goes to the stock market. It is why we wanted NAFTA it allows the outsourcing of jobs.

NAFTA will not help the trade deficit because outsourcing of jobs do not count in GDP.



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Ironpost Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:45 PM
Response to Reply #1
3. I don't understand how NAFTA allows the outsourcing of jobs.
Help me out here. North American Free Trade Agreement, whats that got to do with China, India, or the Philippines etc.
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punpirate Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:41 PM
Response to Original message
2. I think the key word with regard to NAFTA....
... is maquiladoro. Those are the border factories on the Mexican side set up by US firms to take advantage of lower labor costs and to use US economic muscle to evade environmental concerns on both sides of the border and to take advantage of the tariff exclusions for goods moved from Mexico through free enterprise zones in the US.

Maquiladoros set up by US firms typically last only a few years. After a short while, Mexican laborers realize they are being screwed by their US employers and begin to organize unions, petition for better working conditions and their communities recognize the environmental damage caused by such US firms.

At that point, the US firms close shop and look for areas with labor shortages and/or compliant local regulations--in Honduras, Guatemala, Vietnam or China. So, US workers first lose jobs to Mexicans, and then, Mexicans lose jobs to other cheap labor areas of the world. Everyone gets screwed.

That's the short version of the nuts and bolts of it.

Cheers.
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Ironpost Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:46 PM
Response to Reply #2
4. Okay
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ulysses Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:50 PM
Response to Original message
5. here.
NAFTA and Workers' Rights and Jobs

The central focus of pro-NAFTA campaigning was the issue of U.S. job creation, so it is fair to measure NAFTA's real-life results against its backers' expansive promises of hundreds of thousands of new, high-paying U.S. jobs. However, even measured against the more lenient "do no harm" standard, NAFTA has been a failure. Using trade flow data to calculate job loss under NAFTA (incorporating exactly the formula used by NAFTA's backers to predict 200,000 per year NAFTA job creation) yields net job destruction numbers in the hundreds of thousands. Whether the loss of hundreds of thousands of jobs qualifies as "a giant sucking sound" depends on the ear of the listener. It is clear, however, that NAFTA has indisputably led to widespread job loss, with over 412,177 U.S. workers certified as NAFTA casualties under just one narrow government program. The fact that job growth totally unrelated to NAFTA has produced a net gain in U.S. employment during this period in no way changes the reality that NAFTA has cost large numbers of individual workers their jobs, most of whom are now unemployed or working at jobs that pay less than the ones they lost.

The U.S. economy created jobs at a fairly rapid rate in the 1990s, but without NAFTA, hundreds of thousands of full time, high wage, benefit-paying manufacturing jobs would not have been lost. It is also important to note that while the U.S. economy is generating substantial numbers of new jobs in absolute terms, the quality of the jobs created is often poor. The U.S. Department of Labor projects that the professions with the greatest expected future growth in the U.S. are cashiers, waiters and waitresses, janitors and retail clerks. These and other lower-wage service jobs are the kind that will most likely be available to workers displaced by NAFTA.

Economic surveys of dislocated workers shows that the jobs lost to NAFTA, in many cases high-paying manufacturing jobs, are, in the majority of cases, replaced by lower-paid employment. NAFTA also has had a negative effect on the wages of many Americans whose jobs have not been relocated but whose wage bargaining power with their employers is substantially lessened; NAFTA puts them in direct competition with skilled, educated Mexican workers who work for a dollar or two an hour or less. NAFTA was supposed to ameliorate this problem by raising Mexican living standards and wages. Instead, both have plummeted, harming the economic prospects for workers on both sides of the border.


http://www.citizen.org/trade/nafta/jobs /

Lots more there.
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On the Road Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Apr-07-05 03:54 PM
Response to Original message
6. Here's the Missing Link:
Edited on Thu Apr-07-05 03:55 PM by ribofunk
There was always cheaper labor available in China. However, Chinese-made products were subject to import tariffs, which could be quite high (it varies greatly by product). It often took away much of the benefit of lower labor costs. And when imports got too high, Congress would often raise tariffs, making it risky to make long-term investments overseas.

The WTO agreements eliminated many of those tariffs, and made it difficult to reimpose them. That made it profitable to relocate manufacturing plants in China and close down the plants here without fear that tariffs would be raised in six months.

BTW, when you specify China I think you mean to ask about the WTO (World Trade Organization) or GATT (Gen Agreement on Tariffs and Trade). NAFTA (No Am Free Trade Agreemt) is a treaty among the US, Mexico, and Canada -- it has had a similar effect on outsourcing manufacturing to Mexico.

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