January Febuary 1995

SAM TRADE

HAVE NAFTA PROMISES FAILED?

CONCLUSION

The promises of major economic growth through free trade agreements such as NAFTA and GATT are unlikely to help U.S. exports and manufacturers nearly as much as they have been advertised.

In the case of NAFTA and Mexico, while U.S. exports have increased, imports have increased faster, resulting in a likely deficit with Mexico in 1995. Trade deficits threaten U.S.workers, U.S. manufacturers and ultimately U.S. exporters because a country cannot export what it no longer produces.

What is emerging from the NAFTA experience is the real beneficiaries are not U.S. exporters, manufacturers or U.S. workers but U.S. multinational companies who invested in Mexico to sell products back to the U.S. market and Wall Street investors who can apparently lose billions of dollars in risky foreign investments and then stampede the U.S. government into bailing them out by shouting "global meltdown."

At a time when the new Republican leadership in Congress is demanding that we get government off of our backs and get the welfare mothers off the federal dole, it is interesting to note that neither they nor the Clinton Administration hesitated long in committing billions of taxpayers dollars to rescue such "unfortunates" as Wall Street investment houses.

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