That's the way bazillionaire and on-again, off-again presidential candidate Ross Perot — 30 years ago Friday — described what would happen if the North American Free Trade Agreement, or NAFTA, was approved: Jobs would move to Mexico so quickly it would make “a giant sucking sound.”
NAFTA was passed. And manufacturing jobs did indeed move out of the U.S. But was that the result of NAFTA or were other forces responsible for that? It depends on whom you ask ...
The North American Free Trade Agreement aimed to promote trade between the U.S., Canada and Mexico. It eliminated or phased out most tariffs between the three countries — particularly on textiles, automobiles and agricultural products — creating a free-trade zone.
Side agreements were included to establish higher standards for workplace safety, labor rights and environmental protection and to discourage businesses from relocating to other countries in order to take advantage of lower wages or looser regulations.
Ronald Reagan had made the idea of a North American free trade zone part of the announcement of his candidacy for president in 1979. In 1992, Bill Clinton was elected president with the support of organized labor. The next year, he joined his predecessors, Reagan and George H.W. Bush, in pressuring Congress for approval of NAFTA.
Labor unions, on the other hand, opposed NAFTA, fearing — as Ross Perot would popularize — a flood of American factory jobs moving to Mexico. Protests were organized in Detroit and Washington.
Clinton responded: “If we don't pass NAFTA, that could still be true. The lower wages and the lower cost of production will still be there. But if we do pass it, it means dramatically increased sales of products made right here in America.”
NAFTA passed both the House and Senate and was signed into law by Clinton on Dec. 8, 1993. It went into effect on Jan. 1, 1994.
Without a doubt, the key moment in the battle over NAFTA came on Nov. 10, 1993, when CNN's Larry King hosted a debate with Ross Perot and Vice President Al Gore.
Gore made a case for raising the standard of living for factory workers in Mexico. Such a move might “cut down on illegal immigration,” he said.
“We do the world's dumbest trade agreements,” Perot said. “You go back to the agreements we've done all over the world (and) you'd be amazed that adults did them.” Perot called for using tariffs, rather than an inclusive free trade agreement.
“If the U.S. is going to do business with another country, let's do business with a country whose people can buy things,” he argued.
“If we keep shifting our manufacturing jobs across the border and around the world and deindustrializing our country, we will not be able to defend this great country,” Perot said. “And that is a risk we will never take.”
Most observers thought Gore trounced Perot, although it's Perot's quip that everyone remembers, 30 years later, even though it wasn't the first time he had used that line.
“We have got to stop sending jobs overseas,” Perot had said in a 1992 Presidential debate. “It's pretty simple: If you're paying $12, $13, $14 an hour for factory workers and you move your factory south of the border, pay a dollar an hour for labor, have no health care — that's the single most expensive single element in making a car — have no environmental controls, no pollution controls and no retirement, and you don't care about anything but making money, there will be a giant sucking sound going south.”
NAFTA resulted in a number of positive outcomes, according to a 2017 report issued by the Congressional Research Service.
This edition of Further Review was adapted for the web by Zak Curley.
