GDP per capita growth

Transcription

1 GDP per capita growth 1980 Index = After NAFTA United States Canada Mexico Source: International Monetary Fund

2 Job growth: U.S. vs. Canada Percent change, year ago After NAFTA Canada 0 United States Source: International Monetary Fund

3 Unemployment: U.S. vs. Canada Percent of total labor force After NAFTA Canada 6 4 United States Source: International Monetary Fund

4 U.S. trade shares of GDP As percent of GDP 5 After NAFTA 4 3 Trade with Canada 2 1 Trade with Mexico Sources: International Monetary Fund, U.S. Census Bureau

5 Trade balance: U.S. and Canada US$ billions After NAFTA Imports 200 Exports Trade balance Source: U.S. Census Bureau

6 Trade balance: U.S. and Mexico US$ billions After NAFTA Imports Exports Trade balance Source: U.S. Census Bureau

7 U.S. trade growth with Canada Annual rate, Rank Commodity Exports (percent) Commodity Imports (percent) 1 Gas, natural and manufactured 29.1 Medicinal and pharmaceutical products Electric current 27.3 Petroleum & petroleum products Coin, including gold coin 18.7 Misc. edible products and preparations Petroleum & petroleum products 15.1 Gas, natural and manufactured Beverages 12.6 Vegetables and fruit Iron and steel 11.8 Electric current Fixed vegetable fats and oils, crude, refined or fractionated Medicinal and pharmaceutical products Misc. edible products and preparations Source: U.S. Census Bureau Organic chemicals Fertilizers Sugars, sugar preparations and honey Essential oils and resinoids and perfume materials 9.9 Dairy products and birds' eggs 0.1 Total 5.9 Total

8 U.S. trade growth with Mexico Annual rate, Rank Commodity Exports (percent) Commodity Imports (percent) 1 Coin, including gold coin 22.5 Dairy products and birds' eggs Transport equipment 21.0 Meat and meat preparations Dairy products and birds' eggs 18.8 Metalworking machinery Beverages 17.2 Gas, natural and manufactured Petroleum and petroleum products 15.6 Transport equipment Misc. edible products and Misc. edible products and 14.6 preparations preparations Crude animal and vegetable 13.5 Beverages Nonferrous metals 13.5 Petroleum & petroleum products Organic chemicals 13.5 Specialized machinery Sugars, sugar preparations and honey 12.8 Nonferrous metals 14.7 Total 8.3 Total 10.1 Source: U.S. Census Bureau.

9 U.S. exports to Canada By commodity, 2007 Miscellaneous manufactured articles, 10.5% Chemicals and related products, n.e.s., 10.3% Food and live animals, 5.8% Machinery and transport equipment, 48.5% All other, 11.3% Source: U.S. Census Bureau. Manufactured goods classified chiefly by material, 13.6%

10 U.S. imports from Canada By commodity, 2007 Chemicals and related products, n.e.s., 7.8% Miscellaneous manufactured articles, 5.1% Machinery and transport equipment, 31.8% All other, 14.9% Manufactured goods classified chiefly by material, 15.3% Source: U.S. Census Bureau. Mineral fuels, lubricants and related materials, 25.1%

11 U.S. exports to Mexico By commodity, 2007 Chemicals and related products, 12.5% Miscellaneous manufactured articles, 9.2% Food and live animals, 6.8% Machinery and transport equipment, 44.1% All other, 12.8% Source: U.S. Census Bureau. Manufactured goods classified chiefly by material, 14.6%

12 U.S. imports from Mexico By commodity, 2007 All other, 7.6% Manufactured goods classified chiefly by material, 7.6% Food and live animals, 4.0% Machinery and transport equipment, 54.1% Miscellaneous manufactured articles, 10.5% Source: U.S. Census Bureau. Mineral fuels, lubricants and related materials, 16.2%

13 U.S. trade with Canada Cork and wood US$ billions 8 Imports Exports Source: U.S. Census Bureau

14 U.S. trade with Mexico Sugars, sugar preparations and honey US$ billions 0.8 Imports Exports Source: U.S. Census Bureau

15 U.S. trade with Mexico Transportation equipment US$ billions 0.8 Imports Exports Source: U.S. Census Bureau

16 U.S. trade with Canada Medicinal and pharmaceutical products US$ billions 5 Imports Exports Source: U.S. Census Bureau

17 Private employment growth Annual growth rate, Source: Bureau of Economic Analysis. Most growth Second tier Third tier Least growth

18 Manufacturing job growth Annual growth rate, Source: Bureau of Economic Analysis. Most growth Second tier Third tier Least growth

19 Illegal immigrant population Percent change State of residence (millions) 2000 to 2006 California Texas Illinois Florida New York Arizona Georgia New Jersey North Carolina Washington Other states Alll states Source: U.S. Department of Homeland Security.

20 Origin of illegal immigrants Europe and Canada, 6% Africa and other, 3% Asia, 13% Mexico, 56% Other Latin America, 22% Sources: CNN, Pew Hispanic Center.

21 Illegal immigrants by occupation 25% 24% 20% 15% 17% 14% 12% 10% 5% 0% Sources: CNN, Pew Hispanic Center. Farming Cleaning Construction Food prep. Production Percent 9% Transport 7%

22 Myth 1: The Trade Balance Mercantilism: exports are good, imports are bad; trade deficits are terrible. In 2007 the United States trade deficit with its NAFTA partners was $140 billion. So NAFTA must be terrible. Everything about this syllogism is wrong. Exports are good and imports are good. Trade agreements don t change trade balances. Trade deficits are not bad per se. Arithmetic to gladden a mercantilist s heart: NAFTA share of the US total trade deficit is only 17 percent ($140 billion out of $855 billion). However NAFTA share of US two-way trade with the world is much larger, 29 percent ($914 billion out of $3,153 billion). Finally, 68 percent of the NAFTA deficit ($95 billion) is attributable to energy imports from Canada and Mexico. Do presidential candidates want to turn out the lights?

23 Myth 2: Job Losses Senator Obama (02/24/2008): One million jobs have been lost because of NAFTA. The Senator s assertion reflects the most extreme estimate of US job losses due to NAFTA, 94,000 a year for a decade. A realistic estimate is 50,000 jobs lost a year and US exports to NAFTA partners support 70,000 new jobs a year. Annually the dynamic US economy displaces approximately 17.5 million jobs and creates about 18.3 million new jobs. NAFTA accounts for a small fraction (under one percent) of annual job churn. Since NAFTA was signed, the US unemployment rate fell from 6.1 to 4.6 percent (1994 to 2007). Where is the sucking sound coming from?

24 Myth 3: Depressed Wages The ratio of US white collar to blue collar compensation stopped its steep rise in 1991, before NAFTA. Between 1991 and 2005, the employment cost index rose 63% for white collar and 58 % for blue collar. Technological change explains roughly half of the US skill premium, while trade and immigration together account for around 10 percent. Texas Ohio Average weekly earnings for manufacturing workers in the 5 states that trade most with Mexico rose more rapidly than the national average between 1997 and 2006: California Arizona Michigan Illinois Average of the 5 states (weighted by manufacturing GDP) Pennsylvania National average

25 Myth 4: Illegal Immigration The flow of illegal immigrants from Mexico increased from an annual average of 270,000 in the 1990s to an annual average of 315,000 in the 2000s. The stock grew from 2.5 million persons in 1995 to 6.6 million in Cause: NAFTA! Wrong! Underlying causes : Persistent huge earnings differentials between Mexico and the United States. In 2006, the hourly compensation for manufacturing workers was $29.60 in the United States and $3.70 in Mexico. A strong US economy versus a mediocre Mexican economy. Between 1995 and 2007, US real GDP grew 3.1 percent per year, very good for an advanced country. During the same period, Mexican real GDP grew 3.7 percent per year, mediocre for a middle-income country. Through improvements in infrastructure and education, the Mexican growth rate could reach 6 percent, drawing hundreds of thousands of new workers into new jobs annually. Facts: NAFTA says nothing about border control; NAFTA visas are available only to skilled professionals. The immigration myth is classic post hoc ergo propter hoc.

26 Population by poverty definition and ratio of Mexican exports to GDP Nutritional poverty 21.2% Human capital poverty 30.0% 13.8% 20.7% Patrimonial poverty 52.4% Exports to GDP ratio 31.9% 42.6% 16.8% Fuente: INEGI y CONEVAL

27 Mexico s GDP Per Capita GDP per capita almost tripled between 1980 and ,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Note: Gross Domestic Product (GDP) per capita, current prices Source: IMF, World Economic Outlook Database, October 2007