International Marketplace Essays (1447 words) - International Trade

International Marketplace America is increasingly connected to the rest of the world as a global economy becomes more important. We participate in the international marketplace both as providers of goods and as consumers. How we buy and sell affects us both in terms of what goods we can choose from, but also what jobs are available, and what kinds of industries will come to dominate our economy. One of the most important changes in recent years in our place in the global economy is the dropping of trade barriers with such political moves as the approval of the North American Free Trade Agreement (NAFTA). This has had an impact on our economy which has filtered down to the everyday lives of our people, both as workers and as consumers. On the one hand, NAFTA has been good in that it has caused the dropping of tariffs by Mexico and Canada, making U. S. goods more affordable in those countries. This has helped to stimulate some areas of the American economy by opening up new markets to sell our products abroad. In urging the passage of NAFTA, the Clinton Administration publications said that NAFTA would increase high wage jobs, boost U.S. growth, and expand the base from which U.S. firms and workers could compete in a world-wide market. It predicted job gains of approximately a million due to increased Mexican exports, and suggested that by 1995 there would be approximately 200,000 more high wage jobs created due to the opening of free markets. The industries most expected to benefit were those dealing in computer technology, machine tools, aerospace equipment, telecommunications equipment, electronics, and medical devices -- all areas where wages were already 12 per cent higher than the national average (Expanding (1993), 3-5). Such growth in jobs would have an effect on the workers and their communities, giving a boost to both individual wealth and the community itself. These benefits spread outward to other areas of the economy, helping people who have jobs in retail, construction, and other areas where workers spend their paychecks. However, there is another effect. As a result of the cheaper labor in Mexico, participation in this part of the international marketplace has led to the loss of many American jobs in certain industries, such as the garment and textile industries. After four years of stability, apparel industry jobs plunged suddenly last year, falling more than ten percent from 945,000 at the end of 1994 to 346,000 in 1995. In addition, 42,000 jobs vanished in the fabrics industry for at total shrinkage of 141,000 jobs. These jobs represented 40 percent of all manufacturing jobs lost in the United States last year ("Squeezing" (1996), D1). Carl Priestland, an economist for the American Apparel Manufacturers Association, predicted that this year another America will likely lose up to another 50,000 jobs in the industry ("Squeezing" (1996), D1). These losses especially affect workers in small towns like Pisgah, Alabama, and Granger, Texas. The approximate 100 people let go in Pisgah this year were emotionally devastated. Not only are they seeing their specific jobs disappear, they are also faced with seeing the entire industry vanish from their area, taking their opportunities with it. One example, Martha Smith, who lost her job sewing children's clothes, is now enrolled in a state-sponsored program to learn clerical skills. She is thereby trading a blue-collar position for one which is in a low-paying and overcrowded field. In fact a great many of the over 650 people who lost sewing jobs in Alabama this year are women struggling to support their families ("Squeezing" (1996), D1). They face a market where they have few skills and little to offer. Given the largely female makeup of the sewing industry, it is unfeasible to try to fit all these displaced workers in the clerical field. And on top of that, when a plant such as the one in Pisgah closes, the entire town and region suffer. Many such towns are dependent on one employer. When that employer leaves for cheaper labor in Mexico, the local economy cannot easily recover. Local merchants lose their customer base; suppliers to the mills lose their markets. In the textile industry, the danger to the worker from NAFTA is twofold. First, there is the danger of moving the plant and its jobs to Mexico, where labor costs are considerably cheaper. Second, there is the increase in importing cheaper textiles and sewn goods from Mexico, where they are already lower-priced due to the cheap Mexican labor. Either way, American blue-collar workers are increasingly losing their jobs. And these