Here’s a letter that I sent 12 days ago to the New York Times Magazine; it was not published.
Editor:
Dan Kaufman’s denunciation of NAFTA relies heavily on fallacies and missing facts (“How NAFTA Broke American Politics,” September 6). For example, it’s untrue that NAFTA “accelerated the hollowing out of America’s industrial base.” In fact, between the January 1994 implementation of NAFTA and the 2001 recession, America’s industrial capacity not only continued to grow, but its pace of growth accelerated. While that growth then slowed, it nevertheless continued. America’s industrial capacity is today at an all-time high and 63 percent larger than when NAFTA took effect. As for America’s industrial production, it hit its all-time high in September 2018, and is now only one percent shy of that peak and 54 percent greater than when NAFTA dawned.
Nor did NAFTA, contrary to Mr. Kaufman’s suggestion, cause or even accelerate the decline in the percentage of private-sector workers who are unionized. That percentage peaked in the mid-1950s and has fallen steadily ever since. Indeed, the trendline of this decline was slightly steeper prior to NAFTA’s enactment than since.
A final fact: NAFTA resulted in Mexican and Canadian tariffs on American imports falling by more than did American tariffs on imports from Mexico and Canada. By 2005 under NAFTA, Mexican tariffs on its North American imports were down from an average of 12.5 percent to zero while Canadian tariffs on these imports dropped from 4.2 percent to zero. In return, U.S. tariffs on Mexican and Canadian imports fell from an average 2.7 percent to zero.*
Sincerely,
Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030* Lorenzo Caliendo Fernando Parro, “Estimates of the Trade and Welfare Effects of NAFTA,” National Bureau of Economic Research, Working Paper 18508, November 2012, page 6.
