NAFTA WAS IT GOOD FOR AMERICA?

The 2016 elections will influence our country’s future in profound ways and they could also have significant consequences for the firearms and ammunition industry, which on the aggregate contributes $50 billion per year to the economy and supports some 288,000 jobs.

The American electorate can no longer rely and the majority of the media to educate and enlighten its viewers and readers by confronting candidates; pressing them to substantiate their positions with relevant details. Instead we ask candidates if they were bullied when they were in high school. So. we’ve decided to use our weekly shoot-the-shits to shed some light on the topics. Our objective is not to convince you of anything. We feel that you have a sufficiently high I.Q. to make your own decision, but there is so much crap being thrown around that’s accompanied by so little analysis that someone needs to do something. We’ve decided to be that someone. So our topic for this week’s shoot-the-shit is NAFTA and was it good for America.

One of the claims to fame circulated by the Clinton Campaign is how great NAFTA was for the country and how former President Bill Clinton should be the economy czar. So we decided to take a look at the numbers to see if they support that assertion. The table below, is a compilation of data provided by the U.S. Census Bureau, I’ll post that link at the end of this article, and it is authoritative.

NAFTA was passed by both houses of Congress in 1993 and signed into law by Bill Clinton in December of 1993. NAFTA went into effect on 1 January 1994. The table details “Exports”, meaning what we sold to them, and “Imports” which is what we bought from them. The last column is the “Net Difference.” If we bought more than we sold the number is a negative value and if sold more than we bought the number is a positive value. That data presented are full year figures from 1994 through 2015. The last line on the table are “Totals.”

What the Clinton campaign will point to is the “Export” column saying something like… “NAFTA increased U.S. Exports to Central and South America from $41.708 Billion in 1994 to $153.306 Billion in 2015; yes, this is true; however, taken by itself it does not tell the complete story. For the same period 1994 to 2015 Imports increased dramatically and from 1998 to 2008, Imports were significantly higher than Exports. If you look at the totals line, you’ll see that for the 1994 to 2015 period Imports exceeded Exports by $97.219 Billion. (Note: imports are actually understated because the numbers do not reflect the $200 – $750 Billion a year of illegal drugs moving through the border into the United States. But we can’t attribute that to NAFTA)

So, who was the principal beneficiary of NAFTA? I’d say Central and South America. We’re willing to call it a win-win; however, NAFTA also created the mechanism for U.S. corporations to establish manufacturing operations in Central and South America to escape the higher cost U.S. labor market and U.S. regulatory overhead – making what Donald Trump is saying in broad terms quite true.

We’ve also added a graph that we think is interesting. I think we can all see and agree that “Imports” are driven by U.S. demand for Central and South American good and services, and “Exports” are driven by Central and South America demand for U.S. goods and services. Now, look at the graph between 2008 and 2009. Imports took a dive coinciding with our own economic crash of 2008. From 2009 through 2011 Imports and Exports grew at nearly the same rate but in 2011 Imports once again  begin to decline. What do you think that says about the U.S. economy and what does it say about Central and South America’s economy? That was a little Quiz for our readers.

We hope you enjoyed the enlightenment and we encourage you to press our lackluster media to do a little homework so we can talk about the topics we love and not infringe on what they should be doing!

Have a great weekend! Spend some quality time with your buds and family; remember that relationships are perishable.

Historical Trade Data Between The United States  and Central and South America
Source: U.S. Census Data
Year Exports Imports Net Diff
2015 153,306.0 115,872.3 37,433.7
2014 184,018.7 150,691.2 33,327.5
2013 184,359.6 158,518.1 25,841.5
2012 183,184.0 171,791.3 11,392.7
2011 169,012.3 174,290.9 -5,278.6
2010 138,576.8 131,424.8 7,152.0
2009 109,548.8 108,099.1 1,449.7
2008 136,945.7 159,979.4 -23,033.7
2007 106,780.4 134,815.6 -28,035.2
2006 88,379.6 123,675.8 -35,296.2
2005 72,323.8 122,873.0 -50,549.2
2004 61,379.7 98,647.8 -37,268.1
2003 51,946.2 78,029.1 -26,082.9
2002 51,551.2 69,503.2 -17,952.0
2001 58,155.9 67,370.0 -9,214.1
2000 59,282.7 73,347.7 -14,065.0
1999 55,152.6 58,464.7 -3,312.1
1998 63,394.9 50,266.1 13,128.8
1997 63,020.1 53,697.0 9,323.1
1996 52,598.7 49,547.0 3,051.7
1995 49,991.4 42,472.5 7,518.9
1994 41,708.2 38,459.8 3,248.4
Totals $2,134,617.3 $2,231,836.4 -$97,219.1

 

image

U.S. Census Data: https://www.census.gov/foreign-trade/balance/c0009.html

Advertisements
This entry was posted in Shoot-the-shit and tagged , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s