What Is A Negative Effect Of Free Trade Agreements

Although INlands` exports to its NAFTA partners have grown dramatically – with real growth of 95.2% to Mexico and 41% to Canada – the growth in imports from Mexico is 195.3% and 61.1% from Canada, which by a very large majority exceeds the growth in exports from Canada. , as shown in Table 1. The net export deficit of $30 billion with these countries increased by 281% in 1993 to reach $85 billion in 2002 (all inflation-adjusted figures in 2002). As a result, NAFTA has resulted in job losses in all 50 states and the District of Columbia, as shown in Figure 1. In September 2003, the U.S. trade deficit with Mexico and Canada increased by 12% compared to the same period of the previous year (U.S. Census Bureau 2003a). Job losses are expected to increase in the same way in 2003. Free trade agreements have also attracted protests from the American public for decades because of fears of job losses abroad with cheaper labor. Nevertheless, proponents of free trade argue that new agreements are improving the economy on all sides.

The WTO recognizes that free trade does lead to job losses. At the 2017 World Economic Forum in Davos (300), the Director-General of the WTO said: Roberto Avédo: We use three-digit sectoral data based on the CIS (U.S. Bureau of the Census 1996, 2003b), deflated with sectoral price indices per chain (BLS 2001) updated using sectoral producer price indices (BLS 2003b). This data is relied on from HS classifications to CIS (1987) using conversion tables on census CDs. CIS data are then integrated into the BLS sectors with BLS branch plans (2003a). The effects on employment at the state level are calculated by assigning imports and exports to states on the basis of their share in three-digit employment at the industrial level for the year 2000 (U.S. Census Bureau 2001). Although Azavédo has argued that other factors are responsible for 80 per cent of the world`s job losses, it is remarkable that the director of the world`s largest free trade advocate has acknowledged that 20 per cent of the world`s job losses are due to free trade. That would certainly be a strong argument against free trade, not for him. And New York Times columnist Paul Krugman argues that free trade agreements with countries like Korea and Colombia are not “job creation measures.” It is hardly a tribute to free trade. Because labor in Mexico is cheaper, many producing industries have withdrawn some of their production from the high-priced U.S.