Economy & Environment Memo - Bobby Orokos

Memorandum on NAFTA and its Effect on US Jobs

To: President of the United States, Donald Trump

Cc. Mark Shirk

April 20, 2017

Mr. President,

Issue Overview:

The North American Free Trade Agreement (NAFTA), is an established treaty between the United States, Canada, and Mexico, in which free trade was established between these three states.  NAFTA has been beneficial for trade between these states, and served as a North American model of the European Union, where the economic ties lead to mutual support politically and militarily.  Although there are many temporary issues with NAFTA, the best option for the future of the United States is to remain in the NAFTA treaty, as it solidifies the nations of North America, and creates the availability of cheap goods.

NAFTA Specifications:

NAFTA is a treaty regarding free trade between the three states of North America.  Under NAFTA, the states of Canada, United States, and Mexico hold open border trades, resulting in low tariffs, and access to cheap goods produced and traded between these states.  Despite these gains, the United States loses its production jobs, as it is cheaper to produce goods in a country with less regulation when it comes to labor laws.  Although with the loss of these jobs, goods are made cheaper in the United States, along with the strengthening of relations between the states of North America, creating a strongly unified continent.

Current Policy:

Under your presidency, discussions of leaving NAFTA are in the works.  NAFTA, although sharing and distributing the labor throughout the continent, has caused the price of goods to go down, while also taking jobs away from American workers, and giving them to Mexican workers in Mexico for cheaper labor.  However, the loss of these jobs has resulted in cheaper goods being sold in the United States.  Under your proposed solution of leaving NAFTA, workers would be able to work again, but because of the high labor standards of labor in the United States, the prices of domestically-produced goods would skyrocket.  However, these jobs would eventually be replaced by automation, therefore resulting in an eventual loss of jobs, and making America an industrial producing economy, as opposed to a service economy.

Proposed Solution:

By remaining in NAFTA, the United States does temporarily lose out in holding the production jobs, but advances in the sense of modernizing our economy.  By taking jobs back to the United States, we are only taking our economy back in time and forcing us to gain temporary wealth, whereas in the long run, these jobs will be replaced by machines.  By remaining in NAFTA, we will continue to modernize our economy and transition to the service economic sector, while maintaining the access to cheap goods.  Under this treaty, America does not “lose out”, but wins in the long run by taking a temporary setback.

Conclusion:

Remaining in NAFTA is the best option for the United States when it comes to modernizing our economy, and achieving our political agenda of cheap goods and the formation of jobs.  Although not necessarily beneficial in the present, the advancement of the economy and workforce in the future will prove truly supportive of the interests of the people of the United States.  Although the older generation of workers will lose their possibilities of working with their trade skill, these skills will eventually be overridden by automation, therefore making it better to replace these jobs now than resort back to them, only to lose them in the future.  The support of the NAFTA treaty is crucial to the overall advancement of the American people and economy.