S. has its 4th highest deficit with Canada ($1.4 billion for July 1995, $18.10 billion for fiscal year 1994) and 5th highest with Mexico ($1.2 billion for July 1995, $8.21 billion for fiscal year 1994). .
However, this is not necessarily a problem for the U.S. - as will be shown in areas where Mexico and Canada have a comparative advantage, it is advantageous for America to use this. .
The biggest complaint about NAFTA is how jobs, mainly blue-collar jobs, will all be lost to Mexico because labor is so cheap down there. This above statement is at least partially true. But in truth Mexican labor is cheaper than American labor. The average U.S. worker makes $10.97/hour while the average Mexican worker makes $1.85/hour. And in the FTZ (Free Trade Zone) in Northern Mexico, the worker makes $0.75/hour. United We Stand, an organization opposed to the NAFTA agreement, has put out many a bulletin on the topic of job loss, due to NAFTA. United We Stand has claimed that already 137,000 jobs have moved from the U.S. to Mexico, but more recently The Denver Post reports that 350,000 jobs have been lost because of NAFTA. .
Originally, the Department of Labor believed that 170,000 jobs would be created in the U.S. by 1995. This was on the assumption that the U.S. trade surplus with Mexico would increase from $1.7 billion/yr. to $8.5 billion/yr. and that every $1 billion in surplus would create 20,000 jobs. Unfortunately, the trade surplus has dropped far below expectations, and has, in fact, become a trade deficit.
United We Stand reports of many prominent companies that are laying off U.S. workers in favor of cheaper labor elsewhere, a direct cause of NAFTA they say. Examples of some of these companies are: Scott Paper, Volkswagen, Samsung, Continental Apparel Manufacturing Co., Levitron, Matsu*censored*a (Panasonic), Chrysler, and Sara Lee. In fact, the greatest Mexican employer right now is General Motors (GM). And the greatest U.