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Trade Makes America Work
The economic populist, trade protectionist streak in the American public today decries trade agreements like NAFTA and the Trans-Pacific Partnership (TPP) as the reasons for their vision of an America in decline. These protectionists do not let facts get in the way of their message that free trade is damaging. But the reality is that the modern era of free trade has had wide-reaching effects, including supporting millions of jobs for Americans.
The protectionist arguments normally go something like this: trade is bad because we lose manufacturing jobs to poorer countries, U.S. manufacturing is on the decline, imports undercut American products, and the U.S. is losing to our trade partners.
The facts tell a much more positive story. Yes, some of our manufacturing jobs have been lost in the last few decades, but not to trade. These jobs were lost due to technological changes that reduced manpower needs. U.S. manufacturing is not on the decline, either—we still make many things. The U.S. is second in world manufacturing output. Our manufacturers are producing double what they made in the early 1980s with one-third fewer workers. That is a reflection of the productivity strides we have made through innovation, not a downside of trade.
Imports do not undercut American products—they help make American products. Approximately half of imports are component parts of American-made goods. Additionally, many of those imports contain parts created in the U.S.—40 percent of the content of Mexican imports and 25 percent of the content of Canadian imports are U.S.-made components. The auto industry in particular relies on these global supply chains, with the average vehicle crossing a North American border multiple times before final assembly.
The U.S. is strengthened by its trade relationships, particularly those with its North American neighbors. Mexico is not beating the U.S.—as a part of the North American supply chain, Mexico and the U.S. (and Canada) work together to make things. Consumers and producers alike benefit from this and other trade relationships, from the variety of goods available for purchase to the high paying jobs supported by our exports.
We do not need to turn inward for jobs, economic growth, and overall prosperity. Our trade relationships and our role in the global economy are the reasons for our strength. Trade makes America work.
Laura Collins is the Deputy Director, Economic Growth at the George W. Bush Institute. Laura previously served as the Director of Immigration Policy at the American Action Forum. Laura has experience in politics, working as a Senior Research Analyst at the Republican National Committee for the 2012 election cycle and in the Texas House of Representatives for the 82nd Legislature. A former practicing attorney, Laura earned a JD from The University of Texas School of Law and a BBA from the University of Oklahoma.Full Bio
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