The Heritage Foundation - Leadership for America

As Michael Gerson points out today, if his promises are worth anything, Barack Obama’s first 100 days will include “arm-twisting Mexico and Canada into a renegotiation of the North American Free Trade Agreement.” In yesterday’s International Herald Tribune, American University Center for North American Studies director Robert Pastor defended NAFTA from the latest liberal protectionist rhetoric:

NAFTA’s goals were to reduce and eventually eliminate trade and investment barriers, and it did that. From 1993 to 2006, trade among the United States, Mexico and Canada tripled - from $289 billion to $846 billion. Foreign direct investment quintupled, tying the economies closer together and forging continental firms. If one measures success by stated goals, NAFTA is a success.

Of course, the main concern with free trade is the effect on jobs. Yet in the first seven years of NAFTA - the period when trade soared - the number of new, relatively higher-paying jobs in the United States grew by 22.7 million. NAFTA cannot claim all, or perhaps even much of the credit, but it surely cannot be blamed for net job loss.

Over the past decades, there has been a steady decline in jobs in manufacturing and agriculture in the United States, but most economists conclude that this is due more to technology than trade, and it reflects a natural progression to a more productive, service-oriented economy.