[PEN-L:4773] WSJ: Revised NAFTA job prediction,Apr.17 (fwd)

[D Shniad <shniad@xxxxxx>]

> Date: Tue, 18 Apr 1995 14:53:23 -0700 (PDT)
> From: Dale Wiehoff <dwiehoff@xxxxxxxxxxx>
> To: Recipients of conference <trade-strategy@xxxxxxxxxxx>
> Subject: Revised NAFTA job prediction
>
> From: dwiehoff (Dale Wiehoff)
>
> From: The Wall Street Journal, April 17, 1995
> By:   Bob David
> Title: The Outlook: Free Trade Is Headed For More Hot Debate:
>
> "The Mexican meltdown demolished the Bush and Clinton administrations'
> formula to sell Nafta: free-trade pacts=exports=jobs. With the peso
> devaluation, the U.S. trade surplus with Mexico will disappear and with the
> claim that Nafta will generate jobs, says Gary Hufbauer, a trade economist
> whose predicition that Nafta would create 130,000 additional jobs in five
> years was parroted by the White House.
> 'The best figure for the jobs effect of Nafta is approximately zero,' he
> says now. 'The lesson for me is to stay away from job forecasting.'"
> ................................................................................
> For more on what Hufbauer and the Economic Policy Institute (EPI) should
> stay away from, please see the review of his book, NAFTA: AN ASSESSMENT, by
> Kai Mander, available at the IATP gopher
> site:<gopher.igc.apc.org:70/11/trade/iatp> in the Trade Library conference,
> topic #139.
> ............................................................................
> ....
> Some excerpts:
>
> "In spite of their own research findings to the contrary, Hufbauer and
> Schott nevertheless hold up the ideological argument of  free trade as
> proof of long-term benefits.  They claim, "Investment by US firms in
> Mexico is a 'good event' rather than a  'bad event' for the United
> States"  because "foreign investment by US firms creates US  jobs,
> both in the short run, by boosting US exports of capital goods, and in
> the long run, by establishing channels for the export of US
> intermediate components, replacement parts, and associated goods
> and services" (19).
>
> The authors hope to quell concern about US companies moving to
> Mexico, but again their argument is inconsistent.  "The fact that some
> US plants close, just as some Mexican plants close, should be read as
> evidence that the market system is working, not that it is failing.
> >From the standpoint of the US economy as a whole, what counts is
> how many net jobs are created by NAFTA" (14).  Ten pages later, in
> arguing the US will benefit from greater competition and a larger
> continent-wide market created by NAFTA,  they claim that increased
> efficiency and higher output will earn approximately $15 billion a
> year between Mexico and the US.  "Over the long-term, this figure --
> not jobs won or lost -- is the true measure of the economic gain from
> the NAFTA agreement," the authors contend (24).
>
> ...Hufbauer and Schott's specific plans are not realistic.  Each seems to
> be based on an amazingly profound faith in the governments and
> corporations of the US, Canada and Mexico to act in an ethical fashion.
> They recommend that the US-Mexico Binational Commission not have
> the "power to levy fines or award money damages against particular
> firms or industries," but instead should act as "a roving spotlight."  If
> businesses do not conduct themselves properly of their own accord,
> the  authors contend, "The glare of publicity should be sufficient to
> promote compliance" in most cases. (30)  While a great glare of
> publicity does have its influence, a commission report would be an
> unlikely source to stir up such a public outcry."
>
> ----
> Dale Wiehoff
> Communications Director
> Institute for Agriculture and Trade Policy (IATP)
> 1313 5th St.,SE, Suite 303
> Minneapolis, MN 55414-1546 USA
> Tel: (612) 379-5980 Fax: (612) 379-5982
> Email: dwiehoff@xxxxxxxx
>
>
>
>
>
>
>