NH News
6:07 pm
Mon December 2, 2013

NAFTA's Impact On New Hampshire

Credit via USTR.gov

Jon Bresler was an early supporter of the North American Free Trade Agreement. As owner of Suncook Woven Labels, a textile company whose customers included Ralph Lauren, The Gap and J.C. Penney, Bresler figured anything that would break down trade barriers between the United States, Mexico and Canada would be good for business.

But, by 1996, two years after NAFTA took effect, the handwriting was on the wall. As his customers sought lower costs with America's newest trade partners, Bresler, who once employed 55 people, laid off nearly a quarter of his workers. A few years later, he went from three shifts a day to one and was down to 13 employees.

Then, in 2001, China entered the World Trade Organization, and Bresler’s customers suddenly had unfettered access to some of the world’s cheapest labor.

“NAFTA was the beginning of the end, but China was the end,” Bresler said. “We had a wonderful company, with the best product in the world. But there was no way to compete with 38 cents an hour.”

As the 20-year anniversary of NAFTA approaches, the debate over the 2,000-page treaty, which eliminated tariffs and eased other restrictions on trade, is still going strong. NAFTA created an unprecedented surge in U.S. exports, which supporters say has created hundreds of thousands of American jobs.

But critics argue NAFTA has led to growing trade deficits that have cost the country hundreds of thousands of jobs, while lowering wages and harming the economy.

There’s no question NAFTA opened up Mexico to New Hampshire companies. In the early 1990s, about $50 million in New Hampshire products were sold each year to Mexico, said Dawn Wivell, founder and former director of the New Hampshire International Trade Resource Center. By 2012, the Granite State’s exports to the country totaled $474 million, a nearly 900 percent increase, and representing almost 14 percent of all New Hampshire exports.

“Trade-wise, it was a huge success,” Wivell said. “Because of NAFTA, Mexico was, for a couple or three years, our number-one trading partner. I think that tells a positive story.”

Wivel said NAFTA has spurred a strong high-tech manufacturing sector in New Hampshire. A 2011 report by the TechAmerica Foundation said half of New Hampshire’s exports were high-tech products, putting it third in the country behind Vermont and Idaho. Computer and electronic products account for about $1 billion of New Hampshire's total exports annually.

“That’s the way our export market has developed because the economy developed in Mexico through NAFTA,” Wivel said. “NAFTA took away the tariffs and made our higher end products cheaper to sell.”

But analyses of job losses and displacement linked to U.S. trade policy suggest the benefits of NAFTA and the WTO have come at a cost. The Department of Labor tracks workplaces that apply for benefits under the Trade Adjustment Assistance program, which entitles laid-off workers to training and expanded unemployment assistance.

According to a database maintained by Public Citizen, a nonprofit advocacy group, 114 companies in the Granite State were certified as “trade-impacted workplaces” between 1994-2009. Those companies laid off a total of 10,786 workers, according to the group’s data. Jeri Jewell, who coordinates the state’s TAA program for the New Hampshire Department of Employment Security, said another 4,764 workers have been laid off due to trade agreements since 2009. 

According to the Transitional Adjustment Assistance Program, 114 New Hampshire companies were certified as “trade-impacted workplaces” between 1994-2009. Those companies laid off a total of 10,786 workers. (SOURCE: Public Citizen)

The companies impacted include large manufacturers, such as Flextronics International of Portsmouth, which laid off 350 workers in 2003, and Batesville Casket Company of Nashua, which laid off 225 the following year. According to TAA rulings by the Labor Department, "layoffs occurred on an ongoing basis" as the companies shifted production to Mexico.

And it includes more than two dozen companies that were forced to close after their customers began importing more products and materials from abroad. Bresler said small, homegrown textile companies like his were once at the center of woven label production in the United States. Before NAFTA, he said, there were a handful of plants around the state.

“Nobody survived,” he said. 

Arnie Alpert, New Hampshire coordinator for the American Friends Service Committee, said the Granite State has seen this kind of job displacement before. In the mid-20th century, New England’s once-thriving clothing and textile industries were decimated when companies shifted production to the South.

The same thing is happening today with other goods, such as consumer electronics, appliances and, increasingly, information and technology services, that were once the backbone of the American economy.

“A lot of stuff just isn’t being made here anymore,” Alpert said, “and if it is, it’s being made through processes that are so highly automated, there are fewer number of jobs associated with it. And a lot of the jobs that are left are very low skill and low wage.”

One thing both sides seem to agree on is that, since 2001, China has had a much more powerful impact on American jobs and the economy than NAFTA. Indeed, according to an analysis of labor statistics by the Economic Policy Institute, New Hampshire has lost more than 25,000 manufacturing jobs since 1994. Well over half - more than 16,300 - have been lost or displaced since China joined the World Trade Organization in 2001.

Wivell said she remembers being heckled by anti-NAFTA protesters in the early 1990s while the treaty was being debated in Congress. The “giant sucking sound“ of American jobs going south to Mexico, as famously predicted by businessman Ross Perot, never happened, Wivell said.

Still, she acknowledged, ‘There is always somebody in the trade game who suffers. There is no disputing that.”

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