Pact leaves winners and losers, but its overall impact is more complex than the trade balance suggests
Trucks lining up to cross to the U.S. near Tijuana, Mexico on Wednesday. Photo: Guillermo Arias/Agence France-Presse/Getty Images
For all of the debate sparked by the North American Free Trade Agreement, most economists say its concrete impact on the U.S. economy has been modest—a small gain in growth and efficiency, and a small loss in jobs and lower wages for certain factory workers.
But as with most free-trade agreements, the gains over 23 years have been diffuse and the pains more concentrated, helping stoke the intense political backlash that powered Donald Trump’s presidential campaign, and now his White House move to rip up the agreement.
“Nafta produced large changes in trade volumes, tiny efficiency gains overall, and some very significant impacts on adversely affected communities,” Harvard economist Dani Rodrik said on his blog this week. Mr. Trump exaggerated the pact’s cost on manufacturing jobs, he said, but was “able to capitalize on the very real losses…in certain parts of the country in a way that Democrats were unable to…”