Trump to Announce Plans for Renegotiation of NAFTA: Five Ways to Improve the Agreement

1/23/2017 Mexico Institute Forbes Blog

trump-inaugurationPresident Trump’s road to victory was built on a promise to fight on behalf of the American worker to keep manufacturing jobs in the United States. Rightly or wrongly, Donald Trump and many other Americans put much of the blame for the immense challenges being faced by the working class on NAFTA and other free trade agreements.

The newly updated White House website states, “President Trump is committed to renegotiating NAFTA.” However, “if our partners refuse a renegotiation that gives American workers a fair deal, then the President will give notice of the United States’ intent to withdraw from NAFTA.” Media reports suggest an executive order for a NAFTA renegotiation may be imminent.

An outright withdrawal from NAFTA would be incredibly costly. A Wilson Center study recently found that nearly five million U.S. jobs depend on trade with Mexico, and a good number of them would be put at risk were the agreement to be scrapped. At this point, U.S. and Mexican companies have invested many billions of dollars in each other’s economies to build up a globally competitive regional manufacturing platform upon which cars and other products are jointly manufactured with parts and materials from suppliers dispersed across the continent.

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Trump reaches deal to keep 1,000 jobs at Indiana plant from moving to Mexico

11/29/16 The Guardian

17190003726_efac0b42e2_oNine months after announcing plans to move more than 2,000 jobs from Indiana to Mexico, the Carrier Corporation said Tuesday evening that it had reached a deal with President-elect Donald Trump to keep nearly 1,000 of those jobs in Indiana.

Carrier said via Twitter that it would announce more details soon. The New York Times reported that, according to transition team officials, Trump and Vice President-elect Mike Pence, who is Indiana’s governor, would appear at Carrier’s Indiana factory on Thursday to announce a deal.

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The Case for Partnering with Mexico

11/7/2016 The National Interest

By Public Policy Fellow Ambassador Earl Anthony Wayne

mexican flagMexico has been a punching bag in the United States election campaign this year. Rather than hitting our neighbor with insults and threats, however, we should be cementing partnership with Mexico to strengthen our economy and security. The American public has been fed misleading explanations, factual distortions, and bad solutions. A number of the proposed actions regarding Mexico would harm the United States rather than address the challenges we face in creating good jobs, making our economy more competitive, and enhancing border security.

U.S. trade with Mexico supports a net 4.9 million American manufacturing and service jobs spread widely across the United States, according to the Woodrow Wilson Center’s Mexico Institute. Those jobs exist because, under NAFTA, Mexico has become the second largest purchaser of U.S. exports in the world, with Canada being the largest. We trade over a million dollars a minute with Mexico, and the breadth of U.S.-Mexican cooperation is unprecedented, covering trade, public security, immigration, energy, the environment, international affairs, and much more.

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Read our paper “How Trade in Mexico Impacts Employment in the United States”

Check out our project “Growing Together: Economic Ties between the United States and Mexico”

NEW PUBLICATION | Growing Together: How Trade with Mexico Impacts Employment in the United States

growing-together-employment-sectionBy Christopher Wilson

Read the essay

The United States and Mexico trade over a half-trillion dollars in goods and services each year, which amounts to more than a million dollars in bilateral commerce every minute.  With such a large volume of trade, it is not hard to believe that the number of jobs that depend on the bilateral relationship is similarly impressive. New research by the Mexico Institute shows precisely that: nearly five million U.S. jobs depend on trade with Mexico.

The study shows that if trade between the United States and Mexico were halted, 4.9 million Americans from across the country would be out of work.

This essay analyzes the employment impact of bilateral trade on the U.S. economy. Read the essay here.

Key Findings

  • Nearly five million U.S. jobs depend on trade with Mexico… Our model shows that if trade between the United States and Mexico were halted, 4.9 million Americans would be out of work.
  • Many times, it is the availability of cost-efficient inputs that allows U.S. companies to stay competitive enough to fend off competitors from outside the region and to grow exports in the face of fierce global competition. In this way, not just exports but also imports from Mexico help support jobs in U.S. industry.
  • The auto industry, which is probably the single most integrated regional industry, is a perfect example of the benefits of trade integration. Without the availability of nearby Mexican plants to do the final assembly of light vehicles, it is quite possible that the vast U.S. parts producing network for these vehicles would migrate to someplace outside of the continent.
  • Misperception and scapegoating has certainly played a role in creating the current negative political environment around trade…but so has the very real failure of U.S. policymakers to adequately address the challenges facing middle-class Americans.

This essay is part of our project Growing Together: Economic Ties between the United States and Mexico, which explores the bilateral relationship in detail to understand its nature and its impact on the United States. Throughout the fall of 2016, the Mexico Institute will release the findings of our research on our website and social media, using the hashtag #USMXEcon.

Read the essay

A century of data shows that Donald Trump is wrong about the jobs impact of immigration

08/15/2016 Quartz

deportation“Decades of record immigration have produced lower wages and higher unemployment for our citizens, especially for African-American and Latino workers. We are going to have an immigration system that works, but one that works for the American people.” —Donald Trump, in his 2016 Republican party nomination acceptance speech.

If US presidential candidate Donald Trump wants an immigration system that works for Americans, he might want to consider one with far fewer restrictions than he’s proposing.
Immigrants don’t cause high unemployment. In fact, a century of data suggests Trump has both his chronology and his causation reversed—it shows that a thriving US job market causes immigration to rise.

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Mexico Sitting on Untapped Entrepreneurial Talent

07/20/2016 Gallup

emprender.pngWASHINGTON, D.C. — Entrepreneurial talent — an individual’s innate potential to successfully create businesses and jobs — can be found in every postal code in Mexico. But many of these individuals are not being identified and developed.

Just over one in four adults living in Mexico are employed full time for an employer, which is about average for Latin America, but it highlights a disappointing gap between the current state of Mexico’s economy and its potential. The lack of “good jobs” could stem from the sizable informal economy, uncompetitive wages and sparse access to training, development and higher education.

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Mexican consul: NC’s relationship with Mexico an important one

08/10/2016 The Daily Reflector

gomez arnau.jpeg
Photo Credit: San Diego Magazine

The new Mexican consul general for the Carolinas said many people don’t understand the contributions that Mexicans make to the economy of North Carolina.

“Many people don’t know that Mexico is the second biggest export market,” said Remedios Gomez Arnau. “Many people don’t know that there are five big Mexican companies in North Carolina creating jobs.

“Many people don’t know that there are 200,000 jobs in North Carolina depending on the trade with Mexico,” Arnau said. “Many people don’t know that the migrant workers of Mexico that are working here, if they were expelled from North Carolina, it would cost a lot of money to the economy of North Carolina and that many jobs would be lost also.”

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