Analysis of State of Massachusetts on North American Free Trade Agreement - Essay Example

Analysis of State of Massachusetts on North American Free Trade Agreement The support for NAFTA trade pact was not universally agreed throughout the USA (Earl, 192). As a matter fact, it is one of the most controversial issues that have survived over the two decades. This is owing to the economic impacts that it has created in the country, where some $ billion worth of businesses are predicted to have shifted to either Canada or Mexico, while over 1 million jobs are also predicted to have been lost, since the signing and commencement of the implementation of the NAFTA trade pact in 1993 (Mishel and Teixeira, 7). The northern districts and the central districts of the USA were particularly opposed to this implementation, owing to the fact that they formed the bulk of the manufacturing zone in the country, and thus feared the loss of jobs and manufacturing business to either Mexico or Canada (Glick, 198). On the other hand, the southern states and part of the northern states, especially those on the borders were supportive of the implementation of the NAFTA trade pact. Thus, the vote on the North American Free Trade Agreement was an almost evenly divisive issue for Democrats senators during the vote in 1993, where 27 democrat senators voted for the NAFTA implementation, while 28 of the Democrat senators voted against its implementation (Earle, 193). The most notable occurrence however, is that both the Democrat senators from the State of Massachusetts voted for the implementation of the NAFTA trade agreement, despite the issue being highly divisive. In this respect, the question becomes; what informed the Yes vote for State of Massachusetts senators and what uniqueness does the NAFTA pact present for the state that would make the two senators and some members of the congress from the state vote in unison to have the trade pact implemented? At the time of signing this agreement, President Clinton ratified it while still being opposed by 60% of his Democrat counterparts in the legislature, meaning that he got more support from the Republicans than the Democrats, which is a highly unusual scenario (Rosenbaum, n.p.). This simply serves to indicate two major points. First, it indicates the fact that there was no prior agreement between the Democrats caucus in the house on the way the vote should go. Secondly, this scenario indicates that the vote did not go in the way of loyalty to the president or to the party, but on purely partisan interests, most of which were regional (Kollman, 146). The State of Massachusetts vote on NAFTA fulfills the predictions of Gravity model of trade, which provides that economies engage on trade based on their proximity in distance and the difference in the sizes of their economy (Mishel and Teixeira, 7). There are various factors that can explain this unexpected happening in the vote. Despite the fact that the Yes vote was high in the Republican represented states than in the Democrats represented ones, there was one notable pattern that brought both the Democrats and the republicans to vote on the same side of supporting the implementation of the NAFTA pact. The highest percentage of the peripheral states voted Yes, thus supporting the implementation of the NAFTA pact (Earle, 194). The State of Massachusetts is one of the peripheral states in the United States, which borders the Atlantic Ocean towards the North Eastern region of the USA (Kollman, 146). Therefore, Massachusetts State voted favorably for the implementation of the NAFTA states together with the other peripheral states because they stood to gain more from the NAFTA pact than the cores states. This is because; the peripheral states were the ones bordering both Canada and Mexico, which were the countries that were involved in ratifying the NAFTA trade pact. Therefore, it is these peripheral states that stood to benefit more from the trade with these two nations, as both transport and ease of access favored the peripheral states in trade over the core states (Earle, 194). Therefore, it is well informed to conclude that the State of Massachusetts on North American Free Trade Agreement was purely an informed action of regional rather than political interest (Mishel and Teixeira, 5). The State of Massachusetts Yes vote on NAFTA trade pact was informed by the economic gains that the state stood to gain, owing to its proximity to the neighboring countries that were ratifying the free trade pact (Earle, 194). There was a big tension between the labor-intensive states and the business-intensive states. Mostly, the northern states were opposed to the ratification and implementation of the NAFTA trade pact, because of the fear that if the pact was implemented, the states would lose their jobs and manufacturing industries to the other countries, but particularly Mexico (Rosenbaum, n.p.). Therefore, the core states voted against the implementation of the NAFTA trade pact, since they perceived Mexico as a potential competitor with a high competitive advantage over the USA, when it comes to both the cost of labor and the cost of production. Fearing that some of the already established manufacturers within the core states would move their business to Mexico where they would manufacture their products at a relatively low cost and then sell them in the USA duty free, both the congressional representatives from the North and their senate counterparts voted against the implementation of NAFTA (Glick, 198). Nevertheless, despite the fact that the State of Massachusetts is one of the states that borders the northern part of the USA, the congressional representatives and the senate representatives from the State of Massachusetts voted Yes, thus giving consent for the implementation of the NAFTA trade pact (Earle, 194). The State of Massachusetts is among the major states that have a high white-collar economy, with a high number of college-educated population in the white-collar sector who depend on their intellectualism and elite professions as the basis of their livelihoods (Mishel and Teixeira, 12). Therefore, while the majority o the Northern states were greatly concerned about the possibility of losing industries and jobs to countries like Mexico where labor and the cost of production for the industries was comparatively low, the State of Massachusetts did not have to worry very much about losing industries and jobs, due to its dependency on white-collar economy. Secondly, the congressional and senate representative from the Northern states saw the implementation of NAFAT trade pact as a pathway to the start of wage-cutting (Rosenbaum, n.p.). This is because, the cost of labor in other countries like Mexico and Canada was found to be low. Therefore, many industries and other employer organizations would seek to shift their businesses to either Canada or Mexico, or hire the labor force from these countries at a relatively lower price. The effect would be the reduction in the cost of labor for such organizations, which will then cut down the wages payable even for their businesses operating in the USA market (Glick, 198). Nevertheless, while this concern was fundamental to the Northern states, the State of Massachusetts did not perceive this change as a major effect on its white-collar economy, considering the fact that the highest percentage of its population was dependent on the white-collar sectors as opposed to the manufacturing industry (Mishel and Teixeira, 12). Thus, the senate representatives from the State of Massachusetts voted for the implementation of the NAFTA trade pact, despite being one of the states on the northern border of the USA. The pro-NAFTA democrats were mainly from the districts that were considered to be highly white-collar districts (Mishel and Teixeira, 14). In these districts, the economy depends more on the white-collar sector and businesses, as opposed to labor. Therefore, the Yes vote by the Massachusetts State representatives to the senate was informed by the fact that Massachusetts is considered one of the white-collar districts, and thus the implementation of the NAFTA trade pact would be a big boost to the economy of the State, since it would create a more favorable environment for businesses (Glick, 198). Works Cited Earle, Carville. The American Way: A Geographical History of Crisis and Recovery. Lanham, Md: Rowman & Littlefield Publishers, 2003. Print. Glick, Leslie A. Understanding the North American Free Trade Agreement: Legal and Business Consequences of Nafta. Austin: Wolters Kluwer Law & Business, 2010. Print. Kollman, Ken. Outside Lobbying: Public Opinion and Interest Group Strategies. Princeton, NJ [u.a.: Princeton Univ. Press, 1998. Print. Mishel, Lawrence and Teixeira, Ruy A. The political arithmetic of the NAFTA vote. Briefing Paper: Economic Policy Institute, 2003. 1-17. Print. Rosenbaum, David. Sour Taste of NAFTA: Old Friends Become Foes. The New York Times, November 7, 1997. Available at: http://www.nytimes.com/1997/11/07/world/sour-taste-of-nafta-old-friends-become-foes.html Read More