Naysayers' claims to the contrary, the North American Free Trade Agreement is giving a boost to the economies of the United States, Canada and Mexico, says Commerce Secretary Ron Brown.
Trade data for the first six months since NAFTA's New Year's Day implementation show a sharp increase in U.S. exports to both countries, as well as rising imports."There's no question, by any objective analysis, that NAFTA has had the kind of impact we predicted it would have and that the naysayers were wrong," Brown told reporters Thursday. "I hate to say `We told you so' but the fact is, we did."
Despite that rosy analysis, labor economists said the trade figures show troubling trends - that the U.S. trade deficit with Canada is rising, and its surplus with Mexico is shrinking.
"Our imports from Mexico rose faster than our exports to Mexico in the first six months," said economist Thea Lee of the labor-backed Economic Policy Institute. "I'm a little bit puzzled as to why they are selling this as a big success story."
Even as Brown touted NAFTA's promise, his department released monthly figures showing the U.S. trade deficit within North America soared from $478 million to $1 billion between May and June.
U.S. imports from Canada rose from $831 million in May to almost $1.3 billion in June. At the same time, the U.S. trade surplus with Mexico narrowed from $353 million in May to $198 million in June.
Brown predicted the trade imbalance with Canada would lessen as its weakened economy improves. He also discounted the month-to-month data, saying the six-month NAFTA snapshot provides better indicators.
The AFL-CIO, which bitterly opposed passage of the trade pact last year, notes in its own analysis of the first five months of NAFTA that the trade surplus with Mexico stood at $5.4 billion in 1992. The Commerce Department estimates the United States will end this year with a $2.1 billion surplus if trends hold.