The new North American Free Trade Agreement that has been secretly discussed between the US and Canada has a major impact on US jobs and exports.
With the new NAFTA would come an expansion of two Mexican ports, financed by a joint venture between Wal-Mart and Hutchinson Whampoa.
Punta Colonet and Lazaro Cardenas will be equipped to handle 2 million TEUs per year by 2020 which will redirect US port traffic towards Mexico for further handling and distribution throughout the United North America.
The impact on US imports and exports
US port activity will diminish as most imports will be unloaded in the two newly expanded Mexican ports.
That will result in job losses for longshoremen in the US on both the East and West coast ports.
Imported goods, primarily from Asia, will no longer be verified and controlled by US Customs agents but instead will be inspected by Mexican officials leaving a question mark as to the content and quality of the imported products that are destined for further distribution to the US and Canada.
The future of the US trucker
The biggest impact of the new NAFTA will be felt in the US trucking industry.
The unloaded cargo and containers will be transported throughout the US and Canada by Mexican trucking companies and their drivers from the point of origin, the two Mexican ports, to their various points of destination in the South and the North of the US.
One can also easily envision that goods and products made in the US would be transported back to the Mexican ports for export to Europe and Asia, leaving the US trucking companies and their drivers on the sideline.
We can all understand that the pay per mileage of a Mexican trucker is far more competitive than that of an experienced and licensed US trucker, hence the interest of Wal-Mart, the largest importer, distributor and retailer of imported goods, and Hutchinson Whampoa, the Chinese development company, are eager to secure a new NAFTA accord and invest in Mexican ports rather than in the US.
The North American Free Trade Agreement, ratified in 1994, may have resulted in increased free trade between Mexico, the US and Canada, but it has also resulted in the displacement of manufacturing jobs away from the US and primarily in favor of cheap and available labor in Mexico.
One perfect example is that Ford Motor Co., an American icon, has been assembling its Ford focus model in Mexico since the late 1990s.
The new NAFTA will certainly impact the US labor market and will cause job losses across the manufacturing industry but primarily in the trucking industry and America’s ports.
Written by Nick Doms © 2010, all rights reserved.
Comments
I find it interesting that we repeatedly hear of new trade agreements and changes to trade agreements which make them more harmful to US citizens, but never hear of reforms which would make them less harmful to US citizens. Obviously, the "US Trade Representative" is not representing the average US citizen.
Expansion of country of origin labeling (COOL) would be a microscopic improvement.
How much in non-capital manufactured goods are countries like Red China and India importing, for instance?
Meanwhile, even ranches are being off-shored.
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