NAFTA Loopholes Hurt American Workers

Dustin Ensinger, Economy in Crisis The North American Free Trade Agreement could soon be used as a conduit to flood the U.S. market with cheap, duty-free Sri Lankan goods, according to a report at Lanka Business Online. Apparently, Sri Lankan officials are looking to build partnerships with Mexican businesses in order to circumvent U.S. import duties. "Joint business partnerships between Mexican and Sri Lankan companies will help accessing the difficult North American markets," minister of industry and commerce Rishad Bathiudeen said, according to Lanka Business Online. By moving production to Mexico, Sri Lankan companies could theoretically avoid paying tariffs and other duties at the border because of NAFTA. That could allow for an influx of cheap goods that could do America’s economy more harm than good. In effect, they would "harness synergies of Mexican and Sri Lankan entrepreneurs through mutually beneficial partnerships to exploit promising market opportunities in the U.S. and Canada opened by the North American Free Trade Agreement," according to Bathiudeen. The bilateral free trade agreement has already proved to be a disaster. Giving another Third World country market-access to the U.S. at no cost would only exacerbate the problem. Prior to the implementation of NAFTA, the U.S. held a small trade surplus with Mexico of approximately $10 million. By 2007, that surplus had turned into an astounding $91 billion trade deficit. With Canada and Mexico combined, the U.S. has taken a $24 billion trade deficit prior to NAFTA and turned it into a $190 billion deficit - a 691 percent increase. This race to the bottom has had a devastating effect on America’s manufacturing base. Pre-NAFTA, the U.S. had 16.8 million people employed in the manufacturing field. By 2007, that number was down to just 13.9 million. That accounts for over 20 percent of America’s manufacturing jobs over the past 14 years. Those good-paying manufacturing jobs have been replaced by low-paying service sector jobs with little or no benefits. The jobs losses and economic devastation will only get steeper if America allows more cheap goods into the country duty-free. Instead, America should be looking to tighten controls on the free trade agreement, not liberalizing trade even more so. Read original post here.