NAFTA, Part 1: Free Trade Agreements

I had originally planned to do my first NAFTA post on the impact upon Mexico, however, one of my sources required permission for publication, to which I applied but have not yet heard back. Therefore, I thought I would start with an examination of Free Trade Agreements in general and NAFTA in particular so that we may form a foundation for what is to come.

As a long-time advocate of Free Market economics, I am not totally averse to the concept of Free Trade Agreements. On the contrary, I can see where, if properly negotiated with countries with whom we share similar economies and cultures, bilateral agreements of that sort could be highly beneficial to both trading partners. However, an examination of our growing list of Free Trade partners shows a serious lack of economic common sense…and NAFTA is the worst of them.

Probably the least informative government site to utilize for an investigation of Free Trade Agreements is the very site which would most likely be the first traversed for information on these agreements:

The International Trade Administration of the Department of Commerce

http://trade.gov/index.asp

This site is largely devoted to the promotion of FTA’s, and tends to skew the facts toward its own end. As an example, their front page actually heralds a SURPLUS in the trade balance between the U.S. and those trading partners with whom we have implemented agreements:

For this release, manufacturing products are defined as all products that fall under NAICS classifications 31-33. This data will differ from other sources that use a manufacturing definition based on an SITC standard.

This couldn’t be further from the truth! Let’s take a look at the reality.