Ohio benefits from NAFTA

Daniel Christman:

Trade has become a whipping boy in this year's electoral campaign. As the presidential contest got under way in Iowa a few short weeks ago, some candidates railed about the impact of trade on manufacturing jobs, pointing to a Maytag plant that recently closed, its jobs sent overseas.

But those jobs didn't go overseas; they came to Ohio. Whirlpool, which bought Maytag two years ago, chose to consolidate some of its newly acquired manufacturing facilities in the Buckeye State, adding hundreds of new jobs.

Facts are stubborn things, and so it is with trade in general and the North American Free Trade Agreement in particular. Contrary to what some of the candidates are saying, Ohio is benefiting from trade and from NAFTA in extraordinary ways, and no one more than the state's manufacturers.

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So start with the facts. According to the U.S. Department of Commerce, 55 percent of all Ohio exports go to Canada and Mexico. For the nation as a whole, just 35 percent of exports go to our NAFTA partners. In other words, Ohio depends on exports to Canada and Mexico - markets open to Ohio products thanks to NAFTA - to a far greater degree than other states. Ohio's exports to Canada and Mexico have more than doubled since 1994, when NAFTA came into force.

The NAFTA market is especially important for Ohio manufacturers. According to the Bureau of Labor Statistics, a total of 777,000 Ohioans are employed in manufacturing. These workers produced $36.5 billion worth of exports in 2006. Exports to Canada and Mexico account for about $20 billion in Ohio's manufacturing output.

Do the math. Ohio manufacturers are bringing in export revenue of $25,000 for every factory worker they employ. The average manufacturing worker brings home a salary of about $42,000. How could Ohio manufacturers make their payroll without their huge and growing sales to Canada and Mexico? The short answer is, they couldn't.

Too often, arguments over trade miss the simple fact that "free trade" agreements like NAFTA are all about fair trade. Many people don't know that the U.S. market is already wide open to imports; our average duty on imports is about 2 percent. But countries such as Colombia and South Korea impose an average tariff on U.S. manufactured goods of 11 percent - just as Mexico did before NAFTA.

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How did Obama and Clinton miss these facts? Where the union bosses who framed their opinions ignorant of the facts or just trying to mislead voters and their members? Why has Obama suddenly gone silent on NAFTA? Is it because he learned he was wrong, or because his next campaign stop doesn't care? John McCain has challenged his opponents on NAFTA and they have given him a great opportunity.

Hat tip to Don Surber and Larwyn.