Trade deals. Let’s talk about those. A trade deal between equal economies brings out the best in both economies. Let’s think of our own history, and how trade improved it.
Japanese Cars were only part of the Foreign Car boon from the 1970’s on. But let’s focus on Japanese cars for a bit shall we? Japanese cars were small, with small engines, and incredibly reliable. American cars were, and are larger, with big thirsty engines. When the fuel crisis hit, Japanese cars were perfectly positioned to stretch the dollar in gasoline.
American manufacturers adapted. They made smaller cars, but most importantly they improved the quality of the car to close the reliability gap of the imports. They did so by adapting to many of the Japanese techniques in manufacturing. The car buyer got a better quality car, with improved engineering, from all the remaining manufacturers.
Those which did not adapt, failed. They entered the dustbin of history.
In any field, adapting to the competition is a good thing. It means that everyone gets a better product. Moving to aircraft. Boeing, McDonnel Douglas, and Lockheed were the big manufacturers in the world for passenger jets. The only other option in reality were Soviet brands, which were terrible.
Then Airbus got fired up, and began manufacturing planes that were competitors. Now, it is pretty much Boeing and Airbus for the big planes. But look at what has happened. The use of lighter composite materials has increased. This provides a greater efficiency in the aircraft. New engines have been developed, making it a less polluting aircraft, and a more reliable one.
The same is true of ships. Heavy steel has been the material of choice for a long time. Only now, new paint has become available, reducing the friction of the water, increasing efficiency. Everyone is using the paint, no matter where the ship is made. More efficient engines, and power systems. More reliable equipment. The progress from competition is awesome.
Now, what do we have with Mexico? If we agree that Canada has a roughly equal economic power, and the average person does, then what about Mexico? Mexico does not have the economic power of the United States, or Canada. What they do have is cheap labor. So what happens when you make a trade deal between inequal economies? You export manufacturing. This exported manufacturing is a vital part of any economy.
We can have engineers, designers, managers, and the whole building full of college graduates who think of stuff. But we also, as a well rounded economy, need people with wrenches turning the bolts to assemble the items that the aforementioned college folks dreamed up. We need the manufacturing.
The more manufacturing we export to Mexico, the more “middle class” jobs they have. But they aren’t getting what we could charitably call middle class wages. They are getting wages that are in essence insults. If you tried to hire Americans for those jobs, they would balk.
But auto manufacturers are in fact here, staying with cars. Nissan, Honda, BMW, Volkswagen, Toyota, and others make cars and trucks here. But American cars are made in Mexico in many cases.
I remember a news story years ago, where they were singing the praises of the Ford Fusion and how it was bringing back Detroit. The only problem was about half of the Ford Fusions were made in Mexico. So unless Detroit was a town outside of the Mexican Factory, I wasn’t sure how it was helping.
When we export our jobs, we end up with a service economy. This means that the gap between the rich and the poor continues to widen. When you have a balance of jobs, then you have movement between the various sectors. A middle class factory worker sends his son or daughter to college to get an education, and join the management teams. A son of a Manager, finding he is much happier with a wrench in his hand, goes to work as a hourly employee.
There is movement, and the rich families normally consider the blue collar son a black sheep. So what? Everyone chases their bliss. Some of us are fortunate enough to find it.
But when those manufacturing jobs are gone, where do the middle class folks work? Not in the factories in Mexico. They get jobs as salesmen, repairmen, truckers, or other hourly work. The gap between the rich and poor continues to widen, and discontent increases. All from trade between inequal economies.
So tell me why you would sign a trade deal that creates further animosity between the people, and exports the vital manufacturing base that the nation and the balanced employment requires?