« "Are we at full employment yet?" | Main | Inflation and the Debt/GDP ratio »

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Two main problems with this analysis. First, these indicators don't actually say anything about the impact NAFTA had on the economies of the three countries. Yes, we saw growth in GDP/employment between 1994 and 2018 (the "NAFTA era"), but we don't know how much more or less growth we would have seen in the absence of the deal.
Second, these indicators don't reflect many of the concerns of NAFTA's critics, such as rising inequality and stagnant wages. See, for example: https://www.policyalternatives.ca/publications/reports/ascent-giants
Trump's characterization of NAFTA is misguided and opportunistic, but that doesn't necessarily mean the deal has been a good one for the three countries.

Well a full counterfactual analysis perhaps using general equilibrium modelling of what the performance of the economies of Canada, the USA and Mexico would have been like in the absence of NAFTA would be the ideal way to better explore the issue. I would suggest that some Canadian economic think tank might want to put it on its 2019 list of projects. In the absence of that, you might want to check out the following:
https://academic.oup.com/restud/article/82/1/1/1547758
http://www2.hawaii.edu/~noy/362texts/NAFTA-US.pdf
Both of these studies show overall positive gains for everyone but with Mexico getting the largest gains.

For a nice summary of some of the older research on the impact of NAFTA on productivity and wages in Canada, US and Mexico, see: https://www.researchgate.net/publication/23729683_Globalization_and_Its_Impact_on_Labour

Key take away: "There is substantial evidence for North America that free trade has led to higher levels of productivity and real wages. That is especially true for Canada and the United States."

It also references Dan Trefler's earlier work on Canada.

The comments to this entry are closed.

Search this site

  • Google

    WWW
    worthwhile.typepad.com
Blog powered by Typepad