NAFTA — A Short History (Part II)


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Part II:  Made in America, but With Parts From Around the Globe

Clothing. Cars. Computers. Even when something is manufactured in the United States, the product is typically made up of parts and pieces from around the world. The American auto industry is incredibly reliant on imports, with most coming from Japan, China, Canada, Mexico, and Germany. But this cross-border supply chain has helped make the American auto industry competitive with manufacturers in Asia and Europe, which also have a mix of low and high wage producers.

The U.S. and Mexico are inextricably intertwined.  We were even before the introduction of NAFTA. Recent droughts in the U.S. manual labor market have threatened many industries ranging from Maine lobster fishermen to midwestern pig farmers to the auto industry in California.

 

Parag Khana in his book Connectography warns, “The new arms race is to connect to the most markets–a race China is now winning, having launched a wave of infrastructure investments to unite Eurasia around its new Silk Roads.  The United States can only regain ground by fusing with its neighbors into a supercontinental North American Union of shared resources and prosperity.” In other words, we will rise or fall together.

 

One undeniable fact is that Mexico and the U.S. will always be neighbors because of our geographic relationship. In that way, the analogy would be better represented by the bonds of family.  In most neighborhoods, people come and go, but family is always family. Before the rising of China as a major power, the United States was the one and only country setting the rules. Now we see a stronger China trying to gain influence around the world by pulling the strings of international trade.

Chinese economic power has given the country the ability to interfere in the internal policy of other nations, which we have seen with the interference of China in Australia’s political system.  Recently the country has been rocked by information showing that the Chinese State has been active behind the scenes in trying to manipulate the Australian political landscape. “There are claims of Beijing-linked political donors buying access and influence, universities being co-opted as ‘propaganda vehicles,’ and Australian-funded scientific research being diverted to aid the modernization of the People’s Liberation Army (PLA).” [Garnaut, J. (2018, March 9) How China Interferes in Australia. Retrieved from ForeignAffairs.com]

 

Christian Carrillo, CEO of Atisa Industrial, puts it in more practical terms.  “When money goes into Mexico, and Mexico is in NAFTA, that money comes back to the United States in the purchasing of other goods and other products. That’s the beauty of NAFTA. And the most tangible way that’s seen is that out of every dollar of goods imported from Mexico into the United States, forty cents on the dollar originates in raw materials coming from the U.S. Just to put that into perspective, that same number for China is seven cents on the dollar.”

That’s why U.S., Canada, and Mexico have the duty to act as a regional power to protect freedom and democracy around the world. ‘America’ begins at the North Pole and ends in Cape Horn.  It is long overdue that these three American nations move beyond politically motivated arguments and learn to work together for the benefit of all North American citizens.

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