I will sign the North American
Free Trade Act into law
that will tear down trade barriers
between our three nations.
Once upon a time, there was a
bipartisan consensus that free trade
was good for America and the world.
It will create the world's largest
free trade zone and create
200,000 jobs in this country
by 1995 alone.
NAFTA eliminated most tariffs on
products in North America and
regional trade climbed from $290
billion to 1.1 trillion
over the next 20 years.
Canada and Mexico became the two
largest destinations for U.S.
exports.
Although George W Bush imposed job
killing steel tariffs in 2002,
three years later, he signed the
Central American Free Trade
Agreement, eliminating most trade
barriers between the United States
and the region.
But after the financial crisis,
Occupy Wall Street and the
resurgence of the progressive wing
of the Democratic Party, America's
free trade consensus fractured.
Obama couldn't get members of his
own party to ratify the next free
trade agreement, the Trans-Pacific
Partnership.
The TPP, in my view, is
a continuation of disastrous
trade policies and not
is enough.
We need new approaches
to trade, which creates jobs
in America and not in China.
Democrats blamed globalization
for destroying manufacturing jobs.
There's a lot of data about what's
happened in the trade agreements of
the past, and the American worker
has not done well.
And they blamed unemployment caused
by globalization for white working
class support for Donald Trump,
who in turn led the GOP
to stop even paying lip service
to the virtues of free trade.
We're going to renegotiate
NAFTA, probably the
worst trade deal
ever agreed to sign
in the history of the world.
The globalizers overpromised
and under-delivered.
There's no doubt that free traders
have promised a lot when it comes
to trade agreements and the
benefits of trade.
Scotland's income specializes in
trade policy at the Cato Institute.
But in terms of under-delivering,
that's crazy talk.
Our goal as a nation
must be to rely less on imports
and more on products made
here in the USA.
We're bringing manufacturing back to
the United States.
Probably the biggest myth is that
globalization has resulted
in the destruction of the United
States manufacturing base and
the destruction of American
manufacturing jobs.
The reality is far
from that.
The United States remains the second
largest manufacturing nation in the
world. Per worker output
in the United States is actually
higher here than it is in
almost every other country on the
planet.
It's true that the total number of
Americans working in the sector has
declined.
But that's a global phenomenon
driven by automation.
U.S. manufacturing output has more
than doubled since the passage of
NAFTA.
We just make a lot of stuff
with fewer workers, and that
productivity is the main reason
why we've seen jobs decline
in manufacturing.
It's not simply about China.
We can't continue to allow
China to rape our
country. It's the greatest theft
in the history of the world.
The China Shock is a series of
papers written a few years ago that
looked at Chinese import competition
in the United States between 1999
and 2011 and is
routinely used
to denounce not only
China trade, but also globalization
writ large.
These economists found that it was
the cause of several
million American jobs
lost. Chinese import competition
surely displaced some
American workers.
It also helped American consumers
saving American families hundreds
of dollars per year for the rest of
our lives.
That savings goes towards other
goods and services, creating new,
better paying jobs for American
workers.
A lot of the jobs that were
offshored are jobs that are simply
unfit for a high wage,
high productivity US economy.
A lot of the jobs that were
displaced by Chinese imports
were on their way out
anyway, either because of changes
in technology and productivity here
in the United States or because
this was part of a century
long trend of these jobs
moving offshore either to China
or to other lower wage destination
countries like, say, Vietnam or
Mexico.
This pandemic has underscored
the vital importance of
reshoring, our supply chains and
bringing them back into the United
States where they should have never
left. This pandemic has really
illustrated the vulnerability of
the United States to China's control
of our supply chain.
Globalization actually, I think, has
been reproving during
the pandemic.
The fact is that when you look at
the industries and the products that
are most affected
by supply chain crises
and shortages, whether it's baby
formula or COVID 19 rapid
tests or intermodal chases
or pickup trucks, you can go down
the list. And when you scratch those
shortages, you actually find
protectionism underneath.
98% of all baby formula
consumed in the United States is
made in the United States.
And yet shelves are bare for not
just days, but months at
a time. Baby formula is the classic
example. It's a terrible tragedy,
but it's a really useful lesson
for the perils of on
shoring and protectionism.
And imports are basically blocked.
Not only that, you combine
that with high regulatory barriers
and strict regulation of baby
formula. And what happens
is you have a market that is
extremely sclerotic.
It's unable to adjust in times
of crisis.
And so when a baby formula factory
in Michigan went offline, the
market couldn't suddenly adjust and
adapt. Imports couldn't fill the
gap. We also didn't have the
preexisting supply and distribution
networks that were needed to quickly
fill those gaps and make our shelves
full again.
While supply chains and
globalization and global pandemics
surely carry some risks, the
risks are far greater.
When we put all our eggs in that
protectionist basket.
But free and open trade isn't just
good for Americans.
It has immeasurable benefits for the
global poor.
It's a major reason why
billions of humans around
the world have risen out of poverty.
Our purchasing of that cheap T-shirt
gives those humans another
opportunity the opportunity to work
in a factory to escape abject
poverty and subsistence living.
And while we might look down
on those jobs, it's an immense step
up from starvation
and sex work and other types
of things that individuals are being
forced into.
If you look at the numbers,
according to the International Labor
Organization, trade and
globalization have helped remove
billions of people from
that abject poverty.
China is the most obvious example,
but it's not just there.
Sub-Saharan Africa, Bangladesh,
India and the rest millions.
And millions of people are now
able to live more comfortable
lives, more stable and secure lives
because of free trade.