The Trump administration reached a deal with House Democrats this week over a new trade agreement to replace the dreaded NAFTA, and, assuming the deal holds up and the United States-Mexico-Canada Agreement (USMCA) is ratified, it deserves two cheers.
Cheers because the old NAFTA was horrid, gutting towns across the nation, especially in the Midwest, and in many instances fueling illegal immigration.
After NAFTA was enacted, hundreds of thousands of manufacturing jobs were lost when the trade agreement enshrined the principle that U.S. corporations could move their plants to other countries and then sell those products in the U.S. Between 1994 and 2010, the U.S. lost almost 700,000 jobs to Mexico and probably half a million of those can be directly attributed to NAFTA.
That’s not all. Wages were deeply suppressed for American workers. The threat of a company packing up lock, stock, and barrel and fleeing across the southern border forced American workers to accept lower wages to become more competitive with Mexican workers.
What a choice: Low wages or no job at all when the company packed up and left town. Drive around Wisconsin and you can still see the very real human damage NAFTA caused, the very real pain and hopelessness.
That’s not to say NAFTA was a rosy deal for Mexicans. NAFTA allowed the United States to heavily subsidize U.S. agribusiness — by as much as 40% of net farm income — which in turn allowed agribusiness to dump cheap farm products across the border when pre-NAFTA tariffs were repealed.
That drove approximately 1.5 million Mexicans from their farmlands. Anywhere from a half-million to a million more Mexicans were dislocated when NAFTA crashed their small businesses.
And, of course, the displacement of several million Mexicans has been a major cause of the flow of undocumented workers into the U.S. — something most of them likely never wanted to do but were forced to out of desperation.
It looks like the only ones who benefitted from NAFTA were global corporations. So, thank you Bill Clinton, corporate Democrats and big-business Republicans. In other words, thank you, globalists.
Yes, good riddance to NAFTA. And yet we give the replacement agreement only two cheers because, while it is an improvement, it is only a minor one. Even the rosiest assessments project that the deal will create only 176,000 new U.S. jobs, and that’s just a fraction of the damage NAFTA did.
So USMCA is not the dagger into the heart of globalism that President Trump promised. It’s weak tea, as the Economic Policy Institute describes it.
To be fair, though, since Democrats — globalist apologists that they always are — are having to be dragged kicking and screaming into supporting it probably means it’s all the president could get for American workers and farmers.
Still, it’s something, and something is better than nothing. To be sure, as the cheers for the trade deal coming from Wisconsin farmers and business groups this week indicate, it might benefit Wisconsin more than other places.
For example, as the U.S. Chamber of Commerce states, Mexico is the top export market for U.S. dairy exports, and USMCA will lock in that privileged market access, and also improve access to the Canadian market. The USMCA ends Canada’s Class 7 dairy pricing system and will boost American access to Canadian dairy markets by up to 4 percent. That’s critical in Wisconsin.
Manufacturing will be boosted, too. The total value of exports sent to Canada and Mexico from Wisconsin in 2018 was $10.9 billion, and that most certainly will rise.
So the Trump administration deserves praise, and so do Republicans in the state Legislature who lobbied Democratic Gov. Tony Evers for months to support the measure, though to our knowledge he never has.
But again just two cheers. Just as President Trump and Republicans have stood up for the nation’s and the state’s economy, we ask now that our elected leaders in the state make sure that economic growth occurs in all regions of Wisconsin. The state’s elected officials especially need to stand up for the North.
Historically, the northern Wisconsin economy has been given short shrift by both Democrats and Republicans. The Democratic Jim Doyle administration got the ball really rolling by adopting an industrial cluster policy that assigned growth to every part of the state but the North.
We were told to be happy with tourism. Well, tourism is great, but without a diversified year-round economy that builds population, jobs, and wages, there’s no work force or infrastructure to sustain it.
Doyle also sealed our fate with rail, and embraced aggressive comprehensive land-use planning policies that were designed to make northern economic development all but impossible.
Republican Scott Walker was so much better for the state as a whole, but he too failed the North with his aggressive policy of funneling billions of targeted subsidy dollars into developments in southern Wisconsin, sucking any real life out of northern economic development hopes.
Foxconn was the biggest insult, a $3.6-billion handout to an international Goliath for a project that is already at least part boondoggle. That was $3.6 billion that, instead of going to a corporate special interest, could have been used to cut taxes statewide, and to make every region of the state competitive and attractive.
Now along comes Mr. Evers, who hasn’t changed the industrial cluster policy, either, and whose latest budget robbed northern residents of even more.
So we’re pleased that the president and Republicans have stood up for our country and our state, at least modestly so, but we’d be better pleased if politicians in both parties in our state began standing up for the North, too.
It’s way past time for the lip service we’ve been given for decades. As Wisconsin prospers, so should northern Wisconsin and all the citizens of the state.