The Data on Ohio’s Ongoing Trade Job Loss

A Year After Revised NAFTA Deal Announced, Deficit Up 10% as Trump Sidelines Reform with Refusal to Cut USMCA Pharma Terms that Lock in High Drug Prices

A year after Donald Trump announced a revised NAFTA deal, he has sidelined Congress’ consideration of what he calls the U.S. Mexico Canada Agreement (USMCA) by refusing to eliminate new terms that would lock in high U.S. drug prices. As Trump has stalled, the NAFTA deficit has grown 10% and more jobs have been outsourced. Pharmaceutical firms are now spending tens of millions to try to pass Trump’s deal while congressional Democrats insist the new Pharma giveaways be eliminated and stronger labor and environmental standards and enforcement be added to counter NAFTA’s ongoing job outsourcing. The 10% growth in the NAFTA deficit over the past 12-month period continues a Trump-era trend: The 2018 annual U.S. NAFTA goods deficit was up 11% relative to 2017, an increase from $197 billion to $218 billion, and up 19% ($34 billion) in 2018 relative to the U.S. annual NAFTA goods deficit in 2016.

• Ohio has had a net loss of 298,591 manufacturing jobs – almost one in three – since the 1994 NAFTA and 1995 World Trade Organization (WTO) agreements went into effect. 
• Nationwide, America has had a net loss of 3.8 manufacturing jobs – about 23% – since the 1994 NAFTA and 1995 World Trade Organization (WTO) agreements went into effect.  According to the U.S. Department of Labor, manufacturing workers who lose jobs to trade and find reemployment are typically forced to take pay cuts. Two of every five rehired in 2018 were paid less in their new jobs. One in six lost greater than 20 percent of their income. That means a $8,200 pay cut for the median-wage worker earning $41,360. 
• 160,640 Ohio workers are certified as trade job-loss victims under just one narrow U.S. Department of Labor program called Trade Adjustment Assistance (TAA). This is a significant undercount: Workers must know to apply and meet TAA’s narrow criteria, which exclude many types of jobs lost to trade. The top five firms TAA certified for China job loss in Ohio: Masco, Chrysler, Honeywell, AK Steel, Johnson Rubber Company. Top five firms certified for NAFTA job loss in Ohio: Delphi Corporation, General Motors, Marconi Communications, Masco, L.G. Philips Display.
• Nationwide, 980,000 American workers have been TAA-certified as losing jobs to NAFTA. 
• Ohio metro areas with the highest number of Department of Labor-certified trade jobs loss:
  Cleveland-Elyria-Mentor (23,356)
  Youngstown-Warren-Boardman (20,524)
  Dayton (15,390)
  Cincinnati-Middletown (14,956)
  Columbus (10,745)
• During NAFTA’s 25 years in force, 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) turned into a combined NAFTA goods trade deficit of $215 billion in 2018. Before NAFTA, the U.S. had a goods trade surplus with Mexico and Canada in the top 10 products that Ohio exports to the NAFTA nations. We now have a massive $126 billion deficit in trade of those goods to NAFTA nations. 
• The $2.5 billion U.S. agriculture trade surplus with NAFTA partners before NAFTA reversed to a $9 billion deficit in 2018. Nearly 250,000 small- to medium-scale farmers have been driven out of agriculture since the original NAFTA went into effect. None of Ohio’s top-five exports are in agriculture. Nationwide, $15 billion has been lost in U.S. agriculture exports just to China in the past year. Trump’s USMCA cannot fix this or stop future erratic and unpredictable Trump trade actions. Months after USMCA was signed, and boosters claimed it would lock in a new era of certainty in North American trade, Trump threatened to impose new tariffs on all Mexican imports for immigration-related reasons. Because USMCA would simply continue NAFTA’s existing duty-free treatment with very modest increased access for U.S. dairy, poultry, eggs and wine to the Canadian market (around $400 million), the USMCA wouldn’t make a dent.