03/13/04 — Not guilty: NAFTA isn’t responsible for all it gets blamed for

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Not guilty: NAFTA isn’t responsible for all it gets blamed for

“I’m not going to vote Republican anymore because NAFTA caused big corporations to send jobs overseas.”

You hear that so often that you’d almost believe it made sense.

But it doesn’t.

In the first place, NAFTA is not a Republican creation. Although many Republicans — including the one in the White House — support it, NAFTA was adopted during a Democratic administration.

President Bill Clinton and Vice President Al Gore worked hard — and rightly so — to get the North American Free Trade Agreement approved by Congress in 1994. Their initiative included a famous televised debate pitting Gore against anti-NAFTA spokesman Ross Perot.

We are hearing a lot about NAFTA lately because it is an election year, and anything that involves the economy is political fodder. When people blame something or someone for costing them their jobs, it’s a sensitive issue and one about which politicians don’t talk straight.

The straight of it is: If you’re going to vote Democratic, do so because Democrats got NAFTA approved, not because Republicans did. Democrats may now say they oppose NAFTA, and they may say so truthfully, but that doesn’t change history.

Just as common as NAFTA in this year’s political jargon is “outsourcing.” NAFTA gets blamed for a lot of that, too.

In this context, “outsourcing” means having work done in another country, where labor is cheaper, rather than in the United States. Many companies have done that since NAFTA was implemented 10 years ago, but they always have.

Certainly NAFTA has caused some additional manufacturing jobs to be sent out of the country. But it has also caused some to be sent here — “insourcing.” There is a perfect example right here in Wayne County.

Last month the Wall Street Journal ran an article on the Mexican company Gruma’s purchase of Barnes Food Co. of Goldsboro. The article described the way the county persuaded the tortilla company to keep its manufacturing plant here, in a four-year-old shell building. And it noted that the company hires three times as many people in Wayne County as it did before. That “insourcing” is made possible through NAFTA.

So there are jobs lost and jobs gained under the treaty.

Aside from NAFTA — because it applies only to the United States, Canada and Mexico — many other foreign countries have American subsidiaries which have plants or offices in North Carolina. These include such giants as Freightliner and Honda.

All told, according to the Organization for International Investment, the Gruma workers in Wayne County are among 237,000 Tar Heels employed by foreign-based firms. That number has risen by 37 percent in the last 10 years.

There is a lot of talk about the economy as the presidential election approaches. Most of it cannot be taken seriously.

A principle to remember is this: In the end, free trade benefits all. There are sometimes short-term hardships such as the closing of a plant and the loss of low-paying jobs, but our economy is dynamic and ultimately it will replace those jobs. Meanwhile, free trade reduces the prices of consumer goods, opens markets for our manufacturers, and allows our companies to invest more efficiently.

If a politician of any party opposes free trade, write him off.

Published in Editorials on March 13, 2004 11:45 PM