Report | Trade and Globalization

U.S. Jobs and the Mexico Trade Proposal

Briefing Paper #20

Download PDF

In his May 1 letter to the Democratic leadership, George Bush said that
“economic studies show that a free trade agreement would create jobs and
promote growth in the United States.”

But the studies cited by the President and other proponents at best
show only insignlficant gains in employment from a Free Trade Agreement
(FIX), ranging from zero to 64,000 jobs over a ten-year period. Additions to
the Gross Domestic Product (GDP) are projected to be 0.04 to 0.06 percent of
GDP. However, even such modest estimates are based on unrealistic and
inconsistent assumptions, such as: 1) full employment — which assumes away
all job losses! 2) no shift in investment from the high wage U.S. to the low
wage Mexico.

See related work on Trade and Globalization

See more work by William E. Spriggs and Jeff Faux