1Information provided by Arthur Humphrey, national sales manager for Mexico, Heinz Co., April 28, 1997.

2Juan R. Ea, "Impact of the North American Free Trade Agreement (NAFTA) on U.S.-Mexican Trade and Investment Flows," Business Economics, July 1993, pp. 41-7.

3For an overview of many of these studies, see: "Economy-Wide Modeling of the Economic Effects of a FTA with Mexico and a NAFTA with Canada and Mexico," USITC Publication 2516, United States International Trade Commission, May 1992. Among the more well-known studies, see: G.C. Hufbauer and J.J. Schott, "North American Free Trade: Issues and Recommendations," Institute for International Economics, Washington, DC, 1992; U.S. Department of Labor, "Industrial Effects of a Free Trade Agreement between Mexico and the USA," Washington, DC, September 15, 1990; KPMG Peat Marwick, "Analysis of Economic Effects of a Free Trade Agreement Between the United States and Mexico," U.S. Council of the Mexico-U.S. Business Committee, Washington, DC, 1991; R. Hinojosa and S. Robinson, "Alternative Scenarios of U.S.-Mexico Integration: A Computational General-Equilibrium Approach," Working Papers 609, University of California, Department of Agricultural and Resource Economics, 1991; R.K. McCleery and C.W. Reynolds, "A Study of the Impact of a U.S.-Mexico Free Trade Agreement on Medium-Term Employment, Wages, and Production in the United States," Stanford University, 1991; "Economy-Wide Modeling of the Economic Effects of a FTA with Mexico and a NAFTA with Canada and Mexico," USITC Publication 2516, United States International Trade Commission, May 1992; and U.S. International Trade Commission Memorandum, March 8, 1991.

4Michael A. Kouparitsas, "A dynamic macroeconomic analysis of NAFTA," Economic Perspectives, Federal Reserve Bank of Chicago, January 1997. Also see: Sydney Weintraub, "NAFTA at Three: A Progress Report," Significant Issues Series, Vol. XIX, No. 1, Center for Strategic and International Studies, Washington, DC, 1997.

5John Sweeney, "NAFTA's Three-Year Report Card: An 'A' for North America's Economy," The Heritage Foundation: Backgrounder, No. 1117, May 16, 1997.


7A common criticism is that NAFTA has led to higher trade deficits with Canada and Mexico. In fact, the United States has had trade deficits with both nations on and off for many years prior to NAFTA. For instance, America had a trade deficit with Mexico in 1990, which swung to a surplus from 1991 through 1994. It fell to a deficit during the Mexican recession of 1995 and stayed at deficit throughout 1996, before heading toward surplus again in 1997. Also, it is debatable as to whether a trade deficit is economically unhealthy for a nation.

8Most studies will show a dip in exports to Mexico from 1994 to 1995 due to the severity of the Mexican recession and peso crisis that occurred that year. The dip rebounds in 1996.

9Helene Cooper, "Experts' View of NAFTA's Economic Impact: It's a Wash," The Wall Street Journal, June 17, 1997, p. A20.

10Charlene Barshefsky, "Yes, NAFTA is good for America," Pittsburgh Post-Gazette, June 22, 1997, p. B4.

11"Critics say NAFTA has cost 420,000 jobs," Associated Press, June 27, 1997.

12Raul Hinojosa and Goetz Wolff, North American Integration Three Years After NAFTA: The National and Regional Labor Market Impacts, UCLA's North American Integration and Development Center, December 1996 and Sara Silver, "Job impact of NAFTA negligible, study says," Associated Press, December 20, 1996.

13Cooper, "Experts' View of NAFTA& "

14Donald Lambro, "NAFTA Success Saga Beyond Expectations," Washington Times, June 2, 1997 and "NAFTA at Five," Dallas Morning News, January 4, 1999.

15See: The Trade Partnership, "The Impact of the North American Free Trade Agreement on Pennsylvania," Prepared for the U.S. Council of the Mexico-U.S. Business Committee, Washington, DC, September 1992; and Systems Synthesis Project, "NAFTA: A Regional Impact Study for Southwestern Pennsylvania," Carnegie Mellon University, H.J. Heinz School of Public Policy and Management, April 1994, pp. 112-13.

16Paul Kengor, "The Three-Year Effect of NAFTA on Pennsylvania and the Pittsburgh Region," Allegheny Institute for Public Policy, Allegheny Institute Report #97-08, July 1997. Also see: Paul Kengor, "NAFTA: Its Early Effect on Pennsylvania and the Pittsburgh-SWPA Region," Economic Development Commentary, Vol. 20, No. 3, Fall 1996, pp. 24-30.

17The state's first-year increase in exports to Mexico made the nation the second-largest market for Pennsylvania products, hitting $854 million in 1994 and surpassing Japan and the United Kingdom.

18Michael Phillips, "States Rely on Exports to Ease Downturns," The Wall Street Journal, December 26, 1996.

19Calculations by the authors using data from the Bureau of Economic Analysis and the Department of Commerce's International Trade Administration.

20Bill Richards, "Layoffs Not Related To NAFTA Can Trigger Special Help Anyway," The Wall Street Journal, June 30, 1997, p. A1.

21Interview with Reidbord Bros. official who requested anonymity, May 5, 1997.

22Cesca Antonelli, "Uncommon adjustment," Pittsburgh Business Times, November 14-20, 1997, pp. 1 and 47.

23All NAFTA TAA certification decisions and dates are taken from the Employment and Training Administration's Workforce Development Service Center at http://www.wdsc.gov.

24Correspondence with Eagle Precision Technology executive who requested anonymity, April 28, 1999.

25"Peregrine Turnaround Plan Announced." Official company press release, July 7, 1998.

26Based on calculation from NAFTA TAA determinations provided by the North American Integration and Development Center, UCLA.

27Interview with Ray Guy, Canadian Consul and Senior Trade Commissioner in Detroit, April 30, 1999.



30General Motors report on NAFTA.

31"Compilation of Foreign Motor Vehicle Import Requirements," U. S. Department of Commerce, International Trade Administration, Office of Automotive Affairs, February 1999.

32Ford Motor Company report on NAFTA.



35General Motors report on NAFTA.



38"Statement of General Motors Corporation," presented by G. Mustafa Mohataram, Chief Economist, before Committee on Ways & Means, U. S. House of Representatives, September 11, 1997.



41DaimlerChrysler memo from Lisa Maher and Yancy Molnar to co-author Michael LaFaive, November 2, 1999.

42The company did not provide specific export figures. Communications with Dow Chemical officer Frank Farfone, June 1999.

43See Web site, "www.naftaworks.org."

44The U. S. Census Bureau issues two principal data sets that provide merchandise export statistics for sub-national (i.e., state and regional) jurisdictions. They are the Exporter Location (EL) series and the Origin of Movement (OM) series. This document refers to the EL series as the Commerce data. The OM series is known as the "MISER" data. The EL series is more new. The EL data allocates exports according to the physical location of exporters—i.e., it typically traces the export initiative to the point of sale. The EL series is based on the exact data recorded on U.S. export declarations. For instance, if a Detroit company sends its manufactured product to an exporter located in Florida, which in turn is exported abroad by the Florida exporter, that product is considered a Michigan export according to the Department of Commerce's EL series, whereas MISER's OM series considers it a Florida export.

45John Gallagher, "NAFTA Results Lauded," Detroit Free Press, May 6, 1999.

46Data from MISER and the Office of Trade and Economic Analysis, Department of Commerce.

47Authors' calculation from MISER data.

48The 13-percent gain is almost entirely driven by exports to Canada during the period.

49Most Department of Commerce data look at data from 32 categories, but we chose to omit the "special classification provisions" and "unidentified manufacturer" categories. These classifications are ambiguous and analyzing them provides little useful information. There is also a 33rd category included with the Canadian data, "goods imported and returned unchanged." Since this doesn' t represent any actual Michigan production, it, too, is omitted from our calculations.