Lost jobs blamed on trade accord

In a state that bills itself as the nation's most trade-dependent, it's hard to find a politician who's against global free trade.

But a new report argues that the record U.S. trade deficit with Canada and Mexico is costing good jobs, the opposite of what free-trade advocates promised when the North American Free Trade Agreement (NAFTA) took effect in 1994.

The Economic Policy Institute (EPI), a Washington, D.C., think tank, said Thursday that NAFTA has cost the U.S. more than 1 million jobs and billions of dollars in lost wages.

The institute, partly funded by labor unions, said that while NAFTA generated a rise in trade, it has hurt working people, particularly those with minimal education.

U.S. pursuit of new NAFTA-like trade deals in Thailand, South Korea, Central America and other regions has given the debate a fresh urgency.

"We've lost jobs because of growing trade deficits" with Mexico and Canada, said Robert Scott, an EPI economist and a co-author of the report. Since 1993, the cumulative trade deficit with the NAFTA partners has grown to $107 billion, the report said.

Scott estimates that the rise in U.S. exports since NAFTA created 941,000 U.S. jobs. But the larger rise in imports from NAFTA partners displaced 1.9 million jobs that would have been created without the trade deal.

The net total of 1 million jobs lost includes 659,000 in manufacturing and hit hardest in industry-heavy states like Michigan, Indiana, Mississippi and California.

Washington state gained an estimated 14,688 jobs due to the rise in U.S. exports to Canada and Mexico after NAFTA, according to the study. But jobs displaced by rising imports cost the state 31,203 jobs, for a net loss of 16,515 jobs, or about 0.6 percent of the state's job base.

Others economists disputed the study. The number of factory jobs in the U.S. has plunged in recent years, but many economists say more productive U.S. workers are the cause, not trade.

While manufactured imports cause job dislocation, "it would be wrong to equate jobs dislocated with net jobs lost in the economy as a whole," said Gary Hufbauer, an economist at the Institute for International Economics in Washington, D.C.

Hufbauer said the growing U.S. trade deficit wasn't caused by NAFTA but by larger economic forces — the U.S.'s high budget deficit and low savings rate.

Bill Center, president of the Washington Council on International Trade, said that by blaming trade, the EPI study misses the real predicament for U.S. workers — a lack of education, training and government assistance for moving from manufacturing to other jobs.

"They're letting the politicians off the hook," Center said. "Politicians should fix health care, fix education ... Those are the kinds of things we should be addressing. Not trade."

Alwyn Scott 206-464-3329 or ascott@seattletimes.com