NAFTA

If you adhere to the views of Milton Friedman as expounded in his books and his television show Free to Choose then you would welcome international trade even where a country subsidizes its industry and sells more cheaply to you. Friedman's attitude is if the policy of those country's is to extract wealth from their population to put it into a sector and that results in cheaper prices for you then you should take advantage of that to its maximum and buy up to your hearts contentment. Take advantage of their lopsided ways. Likewise with labor. When labor is cheaper elsewhere then take advantage of that. Friedman analyzes the flow of capital and labor as numbers. As always Friedman sides with freedom no matter how disruptive initially.

What Friedman doesn't account for is massive social disruption on a national scale. It doesn't matter to Friedman if a controlled command economy has a policy that destroy's a nation's critical industry such as steel and automobile manufacturing and textiles. If other countries do it more cheaply then fine. Friedman doesn't account for an entire middle class siphoned to Asia and other 3rd world countries with no genuine reciprocity in trade. International trade agreements that create imbalances that over time drain the wealth of a nation to the advantage of other nations, draining our middle class while building theirs, were lower costs for the world and greater overall efficiencies lead to the destruction of socioeconomic tiers while creating greater extremes between rich and poor. To Friedman, people are aggregate numbers and it is those numbers that are important and not American middle class, the acknowledged strength of the nation.

Presently America is the world's golden market. Everyone wants to sell here. We attempt to be leader in free market principles. And countries do take advantage of this. And that is good. While protecting their own markets. And that is bad. Items produced in America face outrageous tariffs in other countries even our allies. So the cost of American goods is increased in foreign markets while the production of their economies are open in ours.

Friedman would say to stick with the areas that you excel. Growing corn and wheat for the rest of the world for example. And buy all you like from countries that sell to you cheaply. Those cheap products are an advantage to American consumers. To the point that Americans no longer have jobs to afford them.

China is not part of NAFTA. NAFTA has allowed China to skirt trade restrictions with the United States designed to correct imbalance of trade due to China's restrictions. With NAFTA China can access American market while continuing to restrict American imports. The imbalance of trade tells the story. It's not because America has nothing worthwhile to trade.  Instead of dealing with U.S. directly and trade with U.S. fairly with equal import / export rules, China can go through Canada and Mexico instead, by direct sales and by manufacturing.  China builds manufacturing plants in our neighboring countries, trades its raw material with them instead of with us, and has instant access to the American market. This is how third party nations exploit loopholes in NAFTA.

Mexico would prefer no border with U.S. so its labor can move freely to the disadvantage of American lowest economic tier. In essence, our middle class gets exported to Mexico by their workers coming here and sending earning home, while manufacturing opens there to the expense of our labor. Mexican middle class grows while ours shrinks, China's middle class grows at the exense of our middle class. Our lower tier grows and becomes even more economically stuck. Canada wants to tack on a whole list of 1st nation progressive agenda items that have nothing to do with legitimate trade and add costs to American products. Canada takes manufacturing jobs with raw materials from 3rd party countries like China with instant access to U.S. market.

Open trade with free flow of goods and labor is still the ideal. And NAFTA is a great idea in theory. A great start and a welcome development. But it has to result in genuine free trade and not hobbled stilted one-sided free trade. Not politicized trade such as Canada insists on inserting. And it's not just China in the east. Over decades Japan too has been incredibly unfair to U.S trade. Tariffs on American-made automobiles are outrageous as with American beef and commodities such as rice, corn, and wheat. The things that we're good at producing are made more expensive in other countries so less of our production is sold there. Trade is not what it could be. All that has to change for genuine free trade. And that is why NAFTA must change or be gone. That is what Trump is addressing presently.