The new NAFTA

For those who remember the Bill Clinton election, who can forget Ross Perot saying about NAFTA, do you hear that giant sucking sound? Well that is US jobs moving to Mexico. The U.S. goods trade deficit with Canada of $31 billion and the $2.7 billion surplus with Mexico in 1993 (the year before NAFTA took effect) turned into a combined NAFTA goods trade deficit of $191.2 billion by 2017, as indicated in the graph above.3 This represents a 576 percent increase in the U.S. goods trade deficit with NAFTA countries. These numbers are inflation-adjusted, meaning the difference is not due to inflation, but an increased deficit in real terms. This is why both parties want to pass the new NAFTA and it looks like they will.