January 1, 2004, marked the tenth anniversary of the North American Free Trade Agreement better known as NAFTA. This anniversary, which was little noticed by the popular press and almost completely ignored by the Bush Administration, provides a good opportunity to look and see what have been the actual effects of NAFTA, particularly as compared to its promised effects. Whether the "Big Sucking Sounds" of Ross Perot or the good jobs and high wages to American and Mexican workers as promised by President George H.W. Bush happened. While ten years is not an overly long time in macroeconomic terms, it is long enough to analyze at least the short-term macro- and microeconomic effects of the agreement. The economy has been through two business cycles (depending on how you count) during this period. Also there have been two administrations in charge with diametrically opposed fiscal and monetary policies. These should neutralize any business cycle or monetary and fiscal policy effects of the Agreement, and allow for a fairly balanced analysis.
Three definite conclusions can be drawn. First, NAFTA did not have the promised effects that were touted by its supporters and were used to convince the U.S. Congress to approve the Agreement and the American people to support it. Second, NAFTA has by and large been a boom for American industry, particularly the large corporations. Third, NAFTA has been an absolute disaster for workers and for the environment.
Over the past decade, America has lost an average of 7.71 million jobs every quarter. The commonly cited Forrester Research prediction of jobs lost to outsourcing estimates that 3.3 million service jobs will be outsourced between 2000 and 2015—an average of 55,000 jobs outsourced per quarter. According to these numbers, at worst, jobs lost to outsourcing represent only 0.71 percent of all jobs lost per quarter as part of normal turnover in the economy................
