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For candidates, a lot of distance between Texas and Ohio on NAFTA
08:22 AM CST on Tuesday, March 4, 2008
WASHINGTON – Both Hillary Clinton and Barack Obama blame NAFTA for making a hash of Ohio's economy. Yet going into today's primaries, they've avoided the topic in Texas. Maybe that's because Ohio's loss is Texas' gain.
In Ohio, the candidates said they would threaten Canada and Mexico with a U.S. pullout of NAFTA in a bid for better terms.
No word of that in Texas, though, where it could cause considerable damage to the economy by limiting access in neighboring countries for the state's exports.
The story line the two senators are working in Ohio to woo voters is that manufacturing jobs left that state to cross the Rio Grande. Ohio's economy is unusually dependent on manufacturing. It has been losing jobs and industries, such as steel, since long before the 1994 enactment of the North American Free Trade Agreement.
But NAFTA gets the blame for what labor unions call a "race to the bottom," where multinational corporations send manufacturing jobs with good wages, pensions, health insurance and other benefits to Mexico and other locations for cheap labor. The unions argue that Mexican workers should have rights to better salaries and benefits, which would slow the flow out of the United States.
The argument resonates in Ohio, not as much in Texas.
"There are lots of parts of Texas that have benefited" from NAFTA, Mrs. Clinton said during last week's debate in Cleveland. "The problem is in places like upstate New York, places like Youngstown, Toledo and others throughout Ohio."
Ohio has lost a quarter-million manufacturing jobs since 2000. About 60,000 of them moved to Canada or Mexico, according to a federal measure of NAFTA's impact on jobs.
The pain wasn't all in Ohio. Texas saw more than 70,000 jobs move to Mexico and Canada. But it's gained more.
Texas' factories have grown more rapidly than those in other states. In 1990, Texas had 5.3 percent of the nation's manufacturing jobs. Today it has 6.7 percent, according to the Federal Reserve Bank of Dallas. Manufacturers in Texas now have about 927,500 factory workers, while Ohio has 777,000. Manufacturing's share of the Texas economy has climbed from 10 percent to 15 percent in the same period. Texas is either the first or second leading exporter among the states, depending on which U.S. Census Bureau measure you use. Last year, Texas exported between $142 billion and $163 billion. Manufactured goods accounted for 95 percent of that.
It's not that Texas is poaching factories from Ohio. Much of Ohio's loss is in the auto industry. There would be a great many more car plants and car parts manufacturers in Texas if they'd gone to Texas, but the auto sector in Texas has been flat.
Proximity to maquiladoras on the border – where labor-intensive factories do their part in Mexico before sending the goods to Texas plants that finish the job – has boosted manufacturing here.
These are not the biggest money earners, however.
Texas plants produce 13 percent of the nation's computers and account for 19 percent of U.S. refined petroleum and coal products, 15 percent of the chemical products and 10 percent of the machinery.
When Mrs. Clinton and Mr. Obama debated in Austin on Feb. 21, both talked of making better trade deals, but they worried more about China than NAFTA.
"I think it is absolutely critical that we engage in trade, but it has to be viewed not just through the lens of Wall Street, but also Main Street, which means we've got strong labor standards and strong environmental standards and safety standards, so we don't have toys being shipped in the United States with lead paint on them," Mr. Obama said.
Mrs. Clinton repeated her call for a pause in free-trade agreements while labor and environmental standards are scrutinized.
"We're going to look and see what's working and what's not working, and I'd like to have a trade prosecutor to actually enforce the trade agreements that we have before we enter into any others," she said.
Opting out of NAFTA won't fix the trade pact. And as a negotiating tactic, it opens other problems. Mexico and Canada have their own agendas for trade reform.
Mexico's President Felipe Calderón, for example, wants greater rights for Mexican workers – but as immigrants who travel to work in the United States.
More Columnist Jim Landers
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