Marco Rubio Caught in Lies about Trade Deficit with Mexico
Senator Marco Rubio (R-FL) was recently asked about his vote on the Trade Promotion Authority, but he then launched into a discussion about alleged trade surpluses, including that with Mexico. In the process, the unconstitutionally ineligible candidate for president told a boldface lie about the reality of trade deficits the US has experienced with Mexico.
In addressing the issue of his vote for TPA, Rubio said, “All we cast a vote on was fast track authority to negotiate a deal. Any final deal still has to be brought before Congress.”
However, since trade agreements include tariffs and tariffs are taxes, they do not begin in the White House. They begin in the House of Representatives. This is why many of us opposed TPA. It’s unconstitutional.
Rubio then went on to claim, “Every country in the world that we have free trade with, we have a surplus. Every one. The countries that we’re doing free trade with are, for the most part, high wage countries. And if we don’t have free trade, we’re going to see more manufacturing leaving the US.”
He then provided an example. He claimed car manufacturers are moving to Mexico is because they have 46 free trade agreements.
“So, if you build a Ford in Mexico, there are 46 countries in the world you can ship those cars to tariff free,” he said. “If you build a car in the US, you only have 20 countries you can ship to. So, guess where the manufacturers are going to go? They’re going to go to the country with the 40 free trade agreements and it’s not just the manufacturer, it’s the people who make the glass, the people that make the doors, the people that make the tires… they all have to be near the manufacturer.”
“So, all this car manufacturing is left to northern Mexico,” he added. “Not because of labor cost, but because of the fact they can ship without trade.”
However, according to The New American, Rubio is lying through his teeth. In the September 2013 edition of The New American, the magazine points out the failed promise that free trade agreements will boost exports and prosperity.
This has been one of the most repeated broken promises of the FTA promoters, with NAFTA (North American Free Trade Agreement) being the prime example. Two of the big-name experts most often cited by NAFTA supporters are Gary Hufbauer and Jeffrey Schott of the Peterson Institute for International Economics (PIIE). In their influential 1993 PIIE paper, “NAFTA: An Assessment,” they predicted that “with NAFTA, US exports to Mexico will continue to outstrip Mexican exports to the United States, leading to a US trade surplus with Mexico of about $7 (billion) to $9 billion annually by 1995.” They further predicted that the US trade surplus with Mexico would rise to $12 billion annually between 2000 and 2010.
But did that happen? No. In fact, NAFTA turned an annual trade surplus with Mexico into an ever-growing deficit. The New American reported in the same edition:
In 1993, the year before NAFTA went into effect, the United States has a $1.66 billion trade surplus with Mexcio; by 1995, the first year after NAFTA had entered into force, that changed to a $15.8 billion deficit. The deficits have escalated ever since, soaring to $24.5 billion in 2000, $49.8 billion in 2005, and $74.7 billion in 2007. From 2010 on, the deficits have been running in the $60+ billion range annually.
As far as Rubio’s car example goes, The New American addressed that too.
In 1993, the year before NAFTA, we imported around 225,000 cars and trucks from Mexico. By 2005, our imports of Mexican-made vehicles had tripled to 700,000 vehicles annually, and in 2012 Mexico’s export of vehicles to the United States surpassed 1.4 million.
Chrysler, Ford and GM transferred major production facilities (and jobs) from the United States to Mexico.
Mexico was not alone in this. Canada also affected trade deficits with the US.
In 1993, our annual trade deficit with Canada was $10.7 billion; by 1995 it had ballooned to $17.1 billion, and by 2005 to $78.4.
This was the result of the free trade agreement called NAFTA. This trade agreement also resulted in at least 720,000 American workers losing their jobs and NAFTA creating a grand total of zero jobs here in America.
Interestingly enough Mr. Hufbauer was interviewed in 1995 after NAFTA’s implementation and admitted he was wrong. “The best figure for the jobs effect of NAFTA is approximately zero… The lesson for me is to stay away from job forecasting.”
I would say the same is true for Marco Rubio and all this clowns that voted for TPA. But it’s not just jobs, these free trade agreements give up national sovereignty. Pro-NAFTA William Orne, Jr. wrote a piece in The Washington Post admitting this.
Didn’t Europe also start out with a limited free trade area? And, given the Brussels precedent, wouldn’t this mean ceding some measure of sovereignty to unelected bureaucrats?…
NAFTA’s defenders said no. They argued that the agreement is designed to dismantle trade barriers, not build a new regulatory bureaucracy. NAFTA, declared one congressional backer, “is a trade agreement, not an act of economic union.”
Yet the critics were essentially right. NAFTA lays the foundation for a continental common market, as many of its architects privately acknowledge. Part of this foundation, inevitably, is bureaucratic: The agreement creates a variety of continental institutions — ranging from trade dispute panels to labor and environmental commissions — that are, in aggregate, an embryonic NAFTA government.
If that was not enough, Professor Robert A. Pastor claimed in the Council on Foreign Relations magazine Foreign Affairs, “NAFTA was merely the first draft of an economic constitution for North America.”
And Andrew Reding of the World Policy Institute, another NAFTA supporter, wrote:
With economic integration will come political integration… One of the purposes of NAFTA and other international trade agreements is to set the principles by which such decisions are to be made, including the critical question of how to “harmonize” differing labor, consumer, environmental, and other standards. By whatever name, this is an incipient form of international government. (emphasis mine)
Even the United States Census Bureau confirms that every year, beginning in October of 1994 to the present, we have been in a trade deficit with Mexico and that proves Marco Rubio is lying. If he’ll lie about that, what else will he lie about?
So, the question must be put to Mr. Rubio, where in the world do you get your information? Perhaps, it’s the same place he gets his information that he is constitutionally eligible to run for president.