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The effects of NAFTA on US trade, jobs, and investment, 1993–2013

Author

Listed:
  • Robert E. Scott

    (Economic Policy Institute, Washington, D.C., USA)

Abstract

Between 1993 and 2013, the US trade deficit with Mexico and Canada increased from $17.0 to $177.2 billion, displacing 851 700 US jobs. All of the net jobs displaced were due to growing trade deficits with Mexico. The number of US jobs displaced by trade deficits with Canada declined slightly between 1993 and 2013. Prominent economists and US government officials predicted that the North American Free Trade Agreement (NAFTA) would lead to growing trade surpluses with Mexico and that hundreds of thousands of jobs would be gained. The evidence shows that the predicted surpluses in the wake of NAFTA's enactment in 1994 did not materialize. Growing trade deficits and job displacement, especially between the United States and Mexico, were the result of a surge in outsourcing of production by US and other foreign investors. The rise in outsourcing was fueled, in turn, by a surge in foreign direct investment into Mexico, which increased by more than 150 percent in the post-NAFTA period.

Suggested Citation

  • Robert E. Scott, 2014. "The effects of NAFTA on US trade, jobs, and investment, 1993–2013," Review of Keynesian Economics, Edward Elgar Publishing, vol. 2(4), pages 429-441, October.
    • Handle: RePEc:elg:rokejn:v:2:y:2014:i:4:p429-441
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Renegotiating NAFTA is putting lipstick on a pig
      by Robert E. Scott in Working Economics on 2017-08-21 20:29:10
    2. Fast Track to Lost Jobs and Lower Wages
      by Robert E. Scott in Huffington Post Business on 2015-04-12 15:47:44
    3. Legalized Political Corruption Is So Much Bigger Than Trump: A Journey in 7 Charts
      by ? in Common Dreams - Breaking News & Views for the Progressive Community on 2019-10-15 04:10:49

    Citations

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    Cited by:

    1. Blecker, Robert A. & Moreno Brid, Juan Carlos & Salat, Isabel, 2017. "Trumping the NAFTA renegotiation An alternative policy framework for Mexican-United States cooperation and economic convergence," Sede Subregional de la CEPAL en México (Estudios e Investigaciones) 42579, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    More about this item

    Keywords

    North American Free Trade Agreement (NAFTA); employment; manufacturing; US economy; Mexican economy; Canadian economy; regional economic integration;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative

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