98-783 E
CRS Report for Congress
Received through the CRS Web
NAFTA: Estimates of Job Effects and Industry
Trade Trends After 5½ Years
Updated December 14, 1999
Mary Jane Bolle
Specialist in International Trade
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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ABSTRACT
During the North American Free Trade Agreement (NAFTA)’s first five and one-half years,
it has served primarily to accelerate trade, plant relocation, and sectoral job “gain” and job
“loss” trends that were already ongoing. This report documents five and one-half years worth
of trends, and includes six tables. They track overall U.S. commodities exports, imports and
trade balance; imports and exports by industry; estimates of jobs supporting those exports,
by state; and industry import and plant relocation effects translated into potential job losses,
both by industry and by state. A separate graph shows re-employment experience of
displaced workers one to three years later. This report is updated periodically.

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NAFTA: Estimates of Job Effects and Industry Trade Trends
After 5½ Years
Summary
Five and one-half years after the North American Free Trade Agreement
(NAFTA) between the United States, Mexico, and Canada went into effect in January
1994, there is a continuing debate over whether it has resulted in job “gains” or job
“losses.” Before NAFTA, estimates were that the trade agreement could result in a
maximum of one million job shifts among sectors over NAFTA’s entire 10-15-year
implementation period.1
In its first five and one-half years, NAFTA has primarily served to accelerate
trade, plant relocation, and sectoral job gain and job loss trends that were already
ongoing. Before NAFTA, no Federal agency documented specific job losses from
imports or plant relocations to Mexico or Canada. Only anecdotal estimates were
available. These statistical gaps make NAFTA’s effects difficult to isolate. Because
it is virtually impossible to discern job effects from NAFTA, this report is really about
job effects since NAFTA. Moreover, job-effect estimates included in this report were
developed by different agencies using divergent methods, are arguably incomplete,
and may not capture all of the sectoral job gains or job losses; but they attempt to
present arguments and data so far.
During a little more than NAFTA’s first five and one-half years (from January
1, 1994 - September 28, 1999), nearly 260,000 primary jobs were certified by the
Department of Labor (DOL) in 2,346 plants as potentially threatened by increased
imports from or plant relocations to Mexico or Canada. Two industries, apparel and
electronics, accounted for about 40% of the NAFTA certifications. According to
recent reports by the Department of Labor, perhaps 20 - 30% of those workers
certified may actually have collected benefits. Others certified may never actually
have lost their jobs, or may have found new jobs before beginning to collect benefits.
Additional job losses may have occurred outside of these figures.

These potential job losses are balanced by an estimated nearly 710,000 net job
gains in the economy from increased exports to Mexico and Canada since NAFTA
took effect. This represents nearly 5% of the 15 million jobs created in the U.S.
economy over the same period of time. It may also account for about 98% of the
697,000 jobs gained in manufacturing over the same period of time, since slightly
more than half of all jobs supporting exports to Mexico and Canada are in the
manufacturing sector.
1For a summary of pre-NAFTA job studies, see U.S. Library of Congress, Congressional
Research Service. NAFTA: U.S. Employment and Wage Effects, by Mary Jane Bolle.
[Washington] April 27, 1995, p. 4. (CRS Report 93-447.)

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Contents
Overall Job Effects Under NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Estimates of Job “Gains” Since NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Difficulty of Making Estimates of Job “Losses” Since NAFTA . . . . . . . . . . . . . 5
How Great Have Certified Job Losses Been Under NAFTA? . . . . . . . . . . . . . . . 6
Industries of Potential Job “Losses” and Estimated Job “Gains” Under
NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Certified NAFTA Cases and Workers by State . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Effects of NAFTA on Jobs in Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Figures
Figure 1. Re-employment Experience of
Displaced Workers 1 to 3 Years Later . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. U.S. Commodities Exports, Imports, and Trade Balance with Mexico
and Canada: 1993 - 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2. Estimates of “Gross” and “Net” Jobs Created from Increased Exports
to Mexico and Canada Since NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 3. Major Industries of Increased Exports to Mexico
and Canada, 1993-1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 4. Industry Effects Since NAFTA: Jan. 1, 1994-Sept. 28, 1999 . . . . . . . 8
Table 5. Potential Job “Loss” by State: Number of Cases and Workers
Certified by the NAFTA-TAA Program, Jan. 1, 1994-
Sept. 28, 1999
Table 6. Appendix. Data on Trade with Mexico and Canada, 1993-1998 . . . 13
Special thanks to Cathi Jones for assistance in obtaining data for this report.

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NAFTA: Estimates of Job Effects and Industry
Trade Trends After 5½ Years
Five and one-half years after the North American Free Trade Agreement
(NAFTA) between the United States, Mexico, and Canada went into effect January
1, 1994, there is a continuing debate over whether the trade agreement has resulted
in net job “gains” or job “losses.” Before NAFTA, estimates were that it could result
in a maximum of one million job shifts among sectors over NAFTA’s entire 10-15-
year implementation period.
Economists believe that overall and in the long run, trade in general and NAFTA
in particular results in neither net job gains nor net job losses — only in reallocations
from less efficient to more efficient industries. Job-effect estimates included in this
report were developed by different methods, are arguably incomplete, and may not
capture all of the sectoral job gains or job losses. Nevertheless, the purpose of this
report is to present, sort out, and explain the arguments and data so far.
Overall Job Effects Under NAFTA
When discussing job effects under NAFTA, most economists emphasize that
both production shifts caused by lowering of trade barriers and resulting job
dislocations are an intermediate step to greater productivity, greater real income, and
a higher standard of living. The effects of NAFTA will take many years to become
fully manifest.
Under NAFTA, trade barriers are being reduced gradually over 10-15 years, and
resulting dynamic gains from trade and accompanying job effects will continue for all
three countries, particularly as the Mexican economy evolves. In this report estimates
of job gains cover NAFTA’s first five years; estimates of potential job losses cover
a bit more than NAFTA’s first five and one-half years.
In its first five and one-half years, NAFTA has primarily served to accelerate
trade, plant relocation, and sectoral job gain and job loss trends that were already
ongoing. Before NAFTA was approved, however, no Federal agency systematically
documented specific job losses from imports or plant relocations to Mexico or
Canada. Only anecdotal estimates were available: Between 1986 and 1993, for
example, an estimated 25,000 jobs in electronics, 20,000 jobs in transportation,
and 17,000 jobs in apparel production moved to Mexico.2 Meanwhile, expanding
exports to Mexico supported increasing numbers of U.S. jobs — an estimated
2U.S. Library of Congress, Congressional Research Service. NAFTA: U.S. Employment and
Wage Effects, by Mary Jane Bolle, op. cit., p. 10.

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CRS-2
538,000 jobs in 1990.3 Now, while estimates are available, hard data still are difficult
to come by. In addition, because it is virtually impossible to discern job effects from
NAFTA, this report is really about job effects since NAFTA.
One more point about overall job effects under NAFTA: Economists argue that
since total U.S. employment (as well as U.S. manufacturing employment) increased
by about 15 million jobs in the 1994-1998 period, any job losses under NAFTA have,
in the aggregate, been more than made up for by job gains in other industries.
Job effects since NAFTA depend on trade effects. Table 1 shows changes in
trade with Mexico and Canada during NAFTA’s first five years. (Trade data at the
industry level are included in the Appendix Table 6.) Since NAFTA went into effect,
exports to and imports from Canada have each increased by roughly 55%. This
suggests little net job effects from trade with Canada. Imports from Mexico,
however, have increased about one and one-half times as much as exports to Mexico.
This suggests some sectoral job “losses” from production shifts to Mexico. However,
since about two-thirds of the increase in imports from Mexico is covered by an
increase in exports to that country, net job effects over NAFTA’s first five and one-
half years are estimated to be relatively small.
Table 1. U.S. Commodities Exports, Imports, and Trade Balance with
Mexico and Canada: 1993 - 1998
(in millions)
1993
1994
1995
1996
1997
1998
MEXICO
U.S. Exports
$41,635
$50,840
$46,311
$56,761
$71,378
79,010
U.S. Imports
40,745
50,356
62,756
74,111
87,167
96,078
Trade
Balance
891
484
(16,445)
(17,350)
(15,789)
(17,068)
CANADA
U.S. Exports
$100,190
$114,255
$126,024
$132,584
$150,124
154,152
U.S. Imports
113,617
131,956
148,304
159,746
171,440
178,048
Trade
Balance
(13,427)
(17,701)
(22,280)
(27,162)
(21,315)
(23,896)
Source: U.S. International Trade Commission Dataweb. http://dataweb.usitc.gov. Numbers in
parentheses represent negative balances.
3U.S. Department of Commerce, Economics and Statistics Administration. U.S. Jobs
Supported by Goods and Services Exports to Mexico, May, 1992. OIMA Research Series
2-92, p. 10, and U.S. Jobs Supported by Goods and Services Exports, 1983-94, OIMA
Research Series 1-96, p. 20.

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CRS-3
Estimates of Job “Gains” Since NAFTA
How great have the sectoral job gains been during NAFTA’s first five years?
The Department of Commerce (DOC), under contract with the University of
Maryland, used an input-output model (incorporating output-per-worker ratios for
each sub-industry) to estimate jobs added to the economy when output for any given
sector increases. This model has been used to calculate the average number of jobs
supported by each billion dollars worth of exports to Mexico and Canada for each
year since NAFTA went into effect. The resulting figures can be used to produce two
separate estimates on job gains in the U.S. economy from increased trade with
Mexico and Canada since NAFTA. The two estimates are “gross” job gains and “net”
job gains (which are mitigated by productivity increases). Both sets of figures are
presented in Table 2, columns 6 and 7, on the following page.
Table 2, in addition to showing estimates of job gains from new trade with
Mexico and Canada since NAFTA went into effect, also includes other data from
which these job gains were derived.

In table 2, columns 2 and 3 list the value of total exports to Mexico and Canada
combined, and new exports for each year since NAFTA went into effect. Column 4
includes figures from the DOC model — the number of jobs supporting each billion
dollars worth of exports to NAFTA partners for the various years. This is a number
which declines each year because of productivity changes.
Column 5 lists total jobs supported by merchandise exports to NAFTA partners
for the respective years.
Columns 6, as mentioned above, reflects “gross” jobs — that is, the value of
new exports, in billions (column 3), times the number of jobs supporting each billion
dollars worth of exports (column 4).
Column 7 reflects “net” jobs, which represents added jobs from increased
exports for a given year, minus jobs lost over the year from increases in productivity.
For any year, this is calculated as the column 5 figure minus the column 5 figure for
the previous year. Estimates of the total net number for jobs “created” from “new”
exports to Mexico and Canada since NAFTA went into effect (709,988) represent
about 5% of the 15 million jobs created in the U.S. economy over the same time.
The overall job gain figures are not sorted by specific industries, because the
Department of Commerce does not publish annual figures showing, by industry, the
number of jobs supported by each billion dollars worth of exports. However, Table
3 shows the major industries of increased exports to Mexico and Canada since
NAFTA went into effect. Table 3 shows that most of the export gain, and therefore
most of the presumed job “gains,” since NAFTA went into effect would be expected
in three manufacturing industries: transportation equipment (e.g., auto and some
parts manufacturing), electronics, and nonelectric machinery (including computers).
However, productivity gains in these industries may eliminate any actual net job gains
in these industries.

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CRS-4
Table 2. Estimates of “Gross” and “Net” Jobs Created Each Year from
Increased Exports to Mexico and Canada Since NAFTA
(4)
Value of Merchandise
Number of
Total Number of Jobs
Exports to NAFTA
Jobs
Supporting New
partners (Can. + Mex.)
Supporting
(5)
Exports to NAFTA
(in $billions)
a Billion
Total Jobs
Partners
Dollars
Supported by
Worth of
Merchandise
(2)
(3)
Exports to
Exports to
(6)
(7)
(1)
Total
New
NAFTA
NAFTA
“Gross”
“Net”
Year
Exports
Exports
Partners
Partners
Jobs
Jobs
1993
142
—
15,123
2,144,834
—
—
1994
165
23
14,361
2,370,929
330,303
226,109
1995
172
7
13,774
2,373,750
96,418
2,821
1996
189
17
13,258
2,510,332
225,386
136,582
1997
221
32
12,755
2,825,258
410,175
314,934
1998
233
12
12,245
2,855,072
142,771
29,805
1999
245
12
11,755
2,877060
136,240
21,992
TOTAL
1,341,293
732,230
Source of data: Department of Commerce, Economics and Statistics Administration.
Table 3. Major Industries of Increased Exports to Mexico
and Canada, 1993-1998
Growth in Industry
% of Total
Export Value 1993-98
NAFTA
Commodity
SIC
Industry
in $billions
% change
Export Gain
37
*Transportation Equip
17
56
19
36
*Electronics
17
81
1819
35
*Nonelectric machinery
16
74
1818
28
Chemicals
8
72
99
33
Primary metals
4
76
54
30
Rubber
4
91
44
38
*Scientific instruments
3
48
33
26
*Paper products
3
69
23
23
*Apparel
2
132
22
20
Food
2
45
22
SUBTOTAL
76
57
84
Other Manufacturing
11
46
12
TOTAL MANUFACTURING
87
65
96
Nonmanufacturing
4
44
4
TOTAL
91
64
100
Source: DOC Office of Trade and Economic Analysis.
* indicates industries that are also prominent in Table 4, which lists major industries of NAFTA-
TAA certification in anticipation of possible job loss.

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CRS-5
Difficulty of Making Estimates of Job “Losses”
Since NAFTA
Some analysts have tried to count sectoral job losses under NAFTA by applying
the DOC “average” (Table 2, column 4) numbers of jobs supporting each $1 billion
of exports, to imports or to net imports (i.e., trade deficits) for the respective years.
However, this methodology is not correct.
Trade deficits cannot be used to measure net job losses because there are no net
job losses as long as output and employment continue to rise. New imports are just
added to domestic output, and not substituted for it. Trade deficits therefore, do not
reflect aggregate jobs lost, but rather, at most, some job gains foregone (which, have
no identifiable victims) in sectors affected by trade.4 Nor can trade deficits be used
to measure specific job losses in various industries. This is because at even the most
detailed industry levels, job losses in one operation may be balanced by job gains from
increased exports or domestic demand in another.
Thus, many specific job losses are hidden in sub-industries. This is not to say the
job losses do not exist. They are very real, and perhaps more accurately counted
directly and tallied up by industry. However, attempting to do this unveils other
problems. Although the Department of Labor regularly publishes the number of job
certifications (potential job losses from trade with Mexico and Canada since NAFTA),
it does not publish the actual number of job losses in various industries, which may
vary as a proportion of certifications, from industry to industry.
4An example helps illustrate: If there is a trade balance, then exports equal imports. A
subsequent trade deficit means either that net imports have increased or net exports have
decreased. If net imports have increased, then extra imported goods consumed in the United
States are being made abroad in jobs held by workers in other countries. Some would argue
that these specific jobs held by foreigners are actually U.S. jobs foregone (gone to other
countries before they were able to become U.S. jobs) — and thus have no identifiable U.S.
victims.
However, not all these imported goods represent jobs that could be held in the United States
for two reasons: First, because countries tend to import goods that are relatively costly to
produce domestically (and to export goods which they can produce most efficiently) imported
goods, in all likelihood, could not be produced as cheaply at home. Therefore, if the imports
were not available, U.S. consumers would presumably buy a lower additional quantity of
domestically produced goods, which would employ a smaller number of additional workers
in the United States than are employed abroad in manufacturing the actual level of extra goods
produced for import into the United States. Second, if the United States is at “full
employment” when there is a trade deficit (as is currently the case) then there would be a
limited supply of available workers to shift into domestic production of these goods.
However, some unknown number of workers would likely be willing and able to shift into jobs
producing these import substitutes if wages were greater than in their current employment, and
if their education and training qualified them for the jobs. Their shifting would leave other
less desirable jobs unfilled.

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CRS-6
How Great Have Certified Job Losses Been Under
NAFTA?
The Department of Labor (DOL) certifies potential job losses from trade with
Mexico and Canada under the NAFTA-Transitional Adjustment Assistance (TAA)
Program. The certification identifies those eligible for training or income replacement
benefits because imports are expected to “contribute importantly” to the potential
for job loss, or the plant is relocating to Mexico or Canada. Hence, NAFTA
certifications cover an unknown number of actual job losses which are a subset of
total job losses from NAFTA. The NAFTA certifications include only those job
losses for which the worker or an employer applied for certification and a direct
linkage to trade with or a shift in production to Mexico of Canada can be verified.
However, NAFTA-TAA certification figures may overestimate job losses among
certified workers. Not all workers certified actually lose their jobs. Rather,
certification numbers represent the total number of workers at the plant which has
applied for certification. Data from the Department of Labor suggest that as few as
20-30% of the certified workers actually collect NAFTA-TAA benefits. (Therefore,
the others certified may either actually not have lost their jobs, may have found
another job in lieu of needing benefits, or for other reasons may not have collected
benefits.)
The DOL has certified roughly 259,618 job losers from 2,179 plants under the
NAFTA-TAA Program in a little more than five and one-half years (January 1, 1994 -
September 28, 1999.) These potential job losers are distributed by industry in Table
4 and by state in Table 5.
A common question relates to the identity of NAFTA-related job losers outside
the NAFTA-TAA subset. Other workers whose job losses may be related to NAFTA
include the following major groups: (1) primary job losers who for some reason
either: (a) did not apply for NAFTA-TAA benefits; or (b) applied and were rejected
because they did not meet the criteria for certification (e.g., imports from Mexico or
Canada contributed “somewhat” rather than “importantly” to their job loss); (2)
secondary job losers (who typically equal about twice the number of primary job
losers) in supplier or distributor industries who did not apply or were not approved
for NAFTA-TAA benefits;5 and (3) other job losers whose job loss is less directly
related to NAFTA and who did not apply or were not eligible for NAFTA benefits.
5U.S. Department of Commerce, Economics and Statistics Administration. U.S. Jobs
Supported by Goods and Services Exports, 1983-92, p. 13 suggests that approximately two
additional jobs support each manufacturing job by producing intermediate inputs, capital
goods, and transportation and other services to the goods to market.

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CRS-7
Industries of Potential Job “Losses” and Estimated Job
“Gains” Under NAFTA
Table 4 shows NAFTA-certified “cases”6 and job losses by industry (columns 1,
2, and 3) in a broader context. For each industry, Table 4 also shows overall industry
employment changes (columns 6 and 7), and trade levels and growth rates (columns
8 and 9) over NAFTA’s first two years, as well as longer-term output (column 4) and
employment (column 5) projections.
During NAFTA’s first five and one-half years, NAFTA-certified job losses
(Table 4, column 3) have occurred in 19 out of a total of 20 manufacturing industries
(column 1) with approximately 41% of the total job loss occurring in two
industries: apparel and electronics. Many of these transitional losses have fallen
more harshly on workers in declining7 industries and declining sectors of growing
industries. Declining industries are indicated by a “D” in column 4 — e.g., leather
manufacturing. In these industries, current and projected output (column 4) and
employment during NAFTA’s first five and one-half years are declining absolutely
(indicated by a negative number in column 6). Declining portions of expanding
industries are not identified. However, the fact that many of the same industries
appear in both Table 3, which identifies major industries of increased exports, and
high up on Table 4, which lists industries of potential job “loss” from new trade with
Mexico and Canada, in descending order, suggests that certain portions of the same
industries are declining, and relocating to Mexico or Canada, while other parts are
increasing their exports. Industries included in both Tables 3 and 4 are listed in bold
typeface and marked with an asterisk (*).
Longer-term output and employment projections have been included in Table 4
(columns 4 and 5) because some observers argue that if NAFTA were repealed, both
output and jobs could be preserved in the United States. Since merchandise exports
to Mexico and Canada combined represent only about 2.7% of U.S. GDP, repeal of
NAFTA would likely have very little effect on these longer-term trends in most
industries.8 These trends show clearly that even though output is expected to increase
in most industries, employment is not expected to increase appreciably.
6“Case” refers to a group of workers applying for NAFTA certification. It may represent a
plant or a production operation.
7Declining industries are typically those at the end of their product life cycle, a concept
authored by economist Raymond Vernon. He hypothesized that, as each product moves
through its natural life cycle from a fledgling product requiring constant research,
development, and refining to a mature product with standardized technology, it likely
experiences changes in the geographical location of its production. After production
technologies are perfected, the product can be manufactured wherever production and
distribution costs are lowest. This frees scarce labor resources for work on other, newly
emerging products.
8U.S. Library of Congress. Congressional Research Service. NAFTA: Economic Effects on
the United States, by Arlene Wilson. [Washington] April 12, 1996. CRS Report No. 96-
336E.

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CRS-8
Table 4. Industry Effects Since NAFTA:
January 1, 1994-September 28, 1999
Cases and Workers Certified and Trade Changes against a Backdrop of
Overall Domestic Output and Employment Trends
Domestic Trends
Trade Trendsd
Projected
Actual
Trade with Mexico
1994-2005b
1993-6/1999
and Canada
combined: 1998 level
1/1/94-
Certified
workers
in $billions; and (%)
9/28/99
as a %
change 1993-98
Industry
Cases
Workers
% Employ-
of total
(SIC)
Certified
Certifieda
Output
Employment
ment
job loss
Change
Change
Change
in (6)
Exports
Imports
(1)
(2)
(3)
(4)
(5)
(6)c
(7)
(8)
(9)
MANUFACTURING 1,698
244,266
S
D
43
220 (66%)
274 (78%)
*Apparel (SIC 23)
645
73,568
S
R/D
-23
33
4
(132)%
9 (206%)
*Electronics (36)
280
33,684
R/E
D
12
37
(81%)
35 (117%)
*Trans. equip.(37)
92
17,092
S
D
7

46
(56%)
74 (70%)
Fab. metals (34)
114
15,372
S
D
12
11
(56%)
7 (126%)
Textiles (22)
105
14,150
N
D
-11
18
4
(100%)
2 (217%)
*Nonelec. mach. (35)
99
11,747
R/E
D
14
37
(74%)
21 (132%)
Lumber (24)
146
9,826
S
D
15
2
(21%)
11 (55%)
*Scientif. inst. (38)
85
9,433
R/E
D
-3
34
9
(48%)
6 (106%)
*Paper products (26)
59
8,982
R/E
N
-2
53
6
(69%)
12 (37%)
Rubber/Plastics (30)
64
7,722
R/E
S
11
9
(91%)
5 (103%)
Leather (31)
68
7,521
D
R/D
-29
22
1
(62%)
1
(65%)
Misc. (39)
48
6,909
S
N
4
3
(55%)
2 (114%)
Primary metals (33)
43
6,321
N
R/D
4
10
(76%)
15 (59%)
Food (20)
40
6,043
S
N
4
8
(45%)
8
(84%)
Stone/clay/glass (32)
43
5,995
N
D
9
3
(43%)
3
(91%)
Furniture (25)
26
4,130
S
N
7
3
(41%)
6 (149%)
Chemicals (28)
40
3,493
S
N
-3
9
19
(72%)
10 (67%)
Prnt./publishing (27)
21
1,995
R/E
S
3
3
(25%)
1 (108%)
Petroleum prods. (29)
3
285
R/E
N
-7
3
3
(65%)
3
(0%)
Tobacco (21)
0
0
D
R/D
-7
*
(21%)
*
(-92%)
NON-MANUFACTURING
S
Commodities
100
7,549
—
—
—
—
13
(44%)
43 (48%)
Services
49
6,234
—
—
—
—
—
—
—
—
Unallocated
142
1,569
TOTAL
1,989
259,618
—
S
16
220 (66%)
274 (78%)
SIC: Office of Management and Budget Standard Industrial Classification codes. Manufacturing industries are represented by
SIC Codes 20-39.
a ”Cases certified” includes a group of workers who may represent a plant or a production operation. Source for plant closings
and job losses: U.S. Department of Labor, Office of Trade Adjustment Assistance.
b Source: Franklin, James. Industry Output and Employment Projections to 2005. Monthly Labor Review, November 1995,
p. 45-59. For output change for the period 1994-2005: D= declining (4-19% decline); N= no change (-2%-+2%); S=
slow-growing (3-25% growth); R/E= rapidly expanding (26-50% growth). For employment change: R/D= rapidly
declining (21-38% decline); D= declining (2-20% decline); N= neutral growth (-3%-+3%) S= slow-growing (4-8%
growth).
c Source: U.S. Department of Labor, Employment and Earnings, all workers
d Detailed trade data are included in appendix Table 6.
*less than 0.5 billion.

---

CRS-9
Therefore, for most industries these projections include only a very marginal job effect
from trade with Mexico and Canada, and an even smaller effect specifically from
NAFTA.
To what extent is NAFTA exacerbating absolute employment declines in certain
industries? During NAFTA’s first five and one-half years industry employment
declined absolutely (column 6) in seven out of 19 manufacturing industries that show
potential NAFTA job loss. Within these seven industries, potential NAFTA job loss
accounted for 3% to 53% of total job loss (column 7). In other industries where
employment did not occur overall, much of the job loss was presumably attributable
to productivity gains or non-NAFTA-related declines in output. Overall, between
1994 and June of 1999, an increase in manufacturing jobs in the U.S. economy has
more than made up for NAFTA job losses. Between January 1994 and June, 1999
manufacturing employment grew by 478,000 jobs or about 2.6%.
To what extent will NAFTA-related job gains occur in the manufacturing
sector in the coming decade? As mentioned briefly earlier in this report, productivity
gains in manufacturing are expected to greatly mitigate job opportunities in this
sector. Little future job growth is expected in any of the four industries that currently
account for 63% of manufacturing exports to Mexico and Canada (Table 4, column
8: transportation equipment, electronics, nonelectrical machinery, and chemicals),
even though two of these industries (electronics and non-electrical machinery)
anticipate rapidly expanding output, and all four industries anticipate expanded trade
with NAFTA partners. Only two industries (rubber/plastics and printing/publishing
— see column 5) anticipate employment growth above 3% for the 11-year period
1994-2005, even though 15 out of 20 industries (column 4) anticipate output growth.
All this means that NAFTA-related job gains in the manufacturing sector could be
very small, and most job gains related to NAFTA will likely occur in other industries.
Certified NAFTA Cases and Workers by State
Table 5 shows the number of cases and workers certified, by state. Three groups
of states have chalked up more than 80% of the NAFTA-related job loss: (1) some
of the more traditional industrial states (i.e., New York, Pennsylvania, Michigan,
Wisconsin, New Jersey, Illinois, Ohio, and Indiana); (2) some of the southern states
which represent some labor-intensive industries as well as some border retail
establishments (i.e. North Carolina, Texas, Georgia, Arkansas, Florida, and
Tennessee), and (3) some of the high-tech states (i.e., Washington and California).

---

CRS-10
Table 5. Potential Job “Loss” by State: Number of Cases and Workers
Certified by the NAFTA-TAA Program,
January 1, 1994-September 28, 1999
Total
Total
Jan. 1994-Sept. 28,
Jan. 1994-Sept. 28,
1999 NAFTA-TAA
1999 NAFTA-TAA
Certified
Certified
STATE
Cases
Workers
STATE
Cases
Workers
North Carolina
171
27,725
Arizona
30
1,354
Texas
252
23,386
Minnesota
20
1,343
Pennsylvania
193
18,663
New Mexico
12
1,260
New York
126
17,487
Maine
18
1,234
California
124
14,825
Kansas
13
1,184
Georgia
110
12,457
West Virginia
18
842
Tennessee
109
12,191
Connecticut
11
780
Indiana
59
9,406
Mississippi
4
753
Arkansas
48
8,993
Puerto Rico
2
631
Michigan
74
8,334
Utah
13
483
Wisconsin
52
7,776
Montana
24
399
Washington
85
7,351
Alaska
5
390
New Jersey
69
7,064
Wyoming
19
371
Alabama
40
6,627
South Dakota
5
319
South Carolina
46
6,551
Iowa
9
300
Virginia
64
6,513
Vermont
4
280
Ohio
53
6,074
North Dakota
4
220
Missouri
67
5,984
Maryland
3
211
Florida
72
5,756
Oklahoma
4
157
Illinois
50
5,718
Nebraska
5
83
Oregon
90
4,907
Nevada
1
1
Louisiana
18
4,688
New Hampshire
0
0
Idaho
38
3,073
Delaware
0
0
Kentucky
30
2,904
Rhode Island
0
0
Massachusetts
31
2,562
Hawaii
0
0
Colorado
28
2,359
Dist. of Col.
0
0
TOTAL
2,346
259,618
Source: U.S. Department of Labor, Office of Trade Adjustment Assistance. Database sorted by
CRS.
Note: Totals in Table 5 do not agree with totals in Table 4 because certain entries which lack SIC
code identifications were not picked up in the Table 4 sort.

---

CRS-11
Effects of NAFTA on Jobs in Perspective
While NAFTA has resulted in job loss in certain import-sensitive industries, it
may have also resulted in job gains in some export-oriented industries. While parts
of many industries are growing as a result of NAFTA, some have lost jobs primarily
because of trade with Mexico and Canada. All the estimated 259,618 workers
certified under NAFTA-TAA are eligible for retraining benefits through local state
employment agencies for up to 18 months, if they actually lose their jobs. Data are
not available to show specific subsequent job history of job losers under NAFTA.
However, a DOL study showing how 3.6 million full-time wage and salary workers
displaced from their jobs between January 1995 and December 1997 had fared one
to three years later in February 1998 offers a possible scenario (see Figure 1).9
Of all workers displaced
Figure 1. Re-employment Experience of
from wage and salary jobs, after
Displaced Workers 1 to 3 Years Later
one to three years, 29% were
29%
confirmed to have found new
Re-employed
full-time at
full-time wage and salary jobs
same or
earning the same or higher
higher
37%
earnings:
salary. Another 37% were re-
Re-employed:
full-time at
employed at lower earnings,
lower
part-time, or were self-
earnings;
employed. Another 24% were
part-time; or
self-employed
unemployed or dropped out of
10%
the labor force. The remaining
Re-employed
24%
full-time; no
10% were re-employed full-
Unemployed or
wage data:
dropped out of labor force:
time but no wage data were
available for their previous
Data source: see foonote at bottom of page.
employment, so it can not be
determined whether they gained
or lost wage ground.
What is happening to U.S. jobs as a result of NAFTA is part of a larger picture
of job changes in the American landscape: Although manufacturing’s real (inflation-
adjusted) output as a percent of real GDP has remained relatively stable,
manufacturing’s employment level and employment share has been shrinking:
Between 1972 and 1998 manufacturing lost 2% of its jobs, while its share of total
U.S. jobs declined from 26% to 15%. Productivity growth and downsizing have
helped some manufacturing industries become more competitive in the international
marketplace. Between 1992 and 1997, manufacturing employment has actually
grown by 3%. In the future, however, as manufacturing employment continues to
shrink from additional productivity gains, most employment gains elsewhere in the
economy that balance out small NAFTA-related job losses will tend to occur in non-
manufacturing sectors.
9Source of data: BLS Finds Risk of Displacement Higher Even as Job Losses Ease in 1995-97
Period. Bureau of National Affairs’ Daily Labor Report, August 20, 1998, p. D-5 — D-13.

---

CRS-12
In conclusion, the estimates reported here provide a medium-term perspective
on possible trade-related effects since NAFTA. An analysis of the complete
employment effects from NAFTA must include many more years of data and more
comprehensive analysis. An accurate assessment of employment effects under
NAFTA would have to separate out from raw data, such non-NAFTA influences as
business cycles, productivity growth, pre-NAFTA-trends, and post-NAFTA
fluctuations in currencies.

---

CRS-13
Table 6. Appendix. Data on Trade with Mexico and Canada, 1993-1997
(in $millions)
TRADE BALANCE with MEXICO
TRADE
EXPORTS to MEXICO (f.a.s. value)
IMPORTS from MEXICO (c.i.f. value)
(exports minus imports)
WITH
%
%
chng
chng
% chng
MEXICO
1993
1996
1997
1998
93-98
1993
1996
1997
1998
93-98
1993
1996
1997
1998
93-98
ALL COMMODITIES
41,635
56,761
71,378
79,010
90
40,745
74,111
87,167
96,078
136
891
(17,350)
(15,789)
(17,068)
(2,018)
MANUFACTURING
39,096
52,312
67,306
74,524
91
31,848
61,035
71,573
82,754
160
7,247
(8,723)
(4,267)
(8,230)
(214)
20—Food products
1,996
2,000
2,385
2,830
42
941
1,499
1,733
2,016
114
1,055
500
652
814
(23)
21—Tobacco
22
38
23
11
(50)
4
11
25
11
175
18
27
(3)
0
(100)
22—Textiles
643
1,035
1,293
1,697
164
123
495
710
735
498
520
540
583
962
85
23—Apparel
1,167
1,986
2,510
2,966
154
2,468
4,708
6,325
7,746
214
(1,300)
(2,722)
(3,814)
(4,780)
267
24—Lumber
484
256
300
378
(22)
326
411
457
422
29
158
(155)
(157)
(46)
(129)
25—Furniture
696
527
650
789
13
915
1,552
1,919
2,290
150
(219)
(1,025)
(1,269)
(1,501)
585
26—Paper
1,376
1,821
2,063
2,298
67
112
247
283
323
188
1,264
1,574
1,780
1,975
56
27—Printing
263
341
329
380
44
75
190
223
258
244
187
151
106
122
(35)
28—Chemicals
3,036
4,574
5,631
6,069
100
810
1,454
1,628
1,598
97
2,225
3,120
4,003
4,471
101
29—Petroleum
813
1,162
1,624
1,504
85
627
431
345
327
(48)
186
731
1,278
1,177
533
3X—Exprts, unident.
1,538
2,108
2,675
3,241
111
—
—
—
—
—
1,538
2,108
2,675
3,241
111
30—Rubbr & plast.
1,632
2,625
3,314
3,865
137
368
711
899
1,067
190
1,264
1,914
2,414
2,798
121
31—Leather
197
243
319
360
83
351
529
617
596
70
(153)
(286)
(298)
236
53
32—Stone, clay,glass
364
478
561
635
74
618
1,016
1,141
1,329
115
(254)
(537)
(580)
694
173
33—Primary metals
1,892
2,796
3,239
3,809
101
1,289
2,789
3,140
3,503
172
602
7
99
306
(49)
34—Fabricatd metls
1,977
2,874
2,879
3,166
60
951
1,699
2,199
2,560
169
1,025
1,175
680
606
(41)
35—Nonelec. mach.
5,210
6,859
9,547
10,270
97
2,031
5,389
7,185
8,598
323
3,179
1,471
2,362
1,672
(47)
36—Elec machinery
8,191
12,522
16,292
17,458
113
11,222
18,542
21,550
25,434
127
(3,031)
(6,019)
(5,259)
(7,976)
163
37—Transprt. equip.
5,112
5,693
8,359
9,298
82
6,446
15,613
16,972
18,816
192
(1,334)
(9,920)
(8,613)
(9,518)
613
38—Scientific instr
1,941
1,797
2,462
2,679
38
1,507
2,584
2,926
3,694
145
434
(787)
(464)
(1,015)
(334)
39—Misc.
547
577
854
833
52
663
1,167
1,295
1,431
116
(117)
(589)
(441)
(598)
416
AGRICULTURE
1,716
3,457
2,857
3,412
99
2,376
3,134
3,304
3,611
52
(660)
322
(447)
(199)
(70)
MINING
290
458
475
424
46
4,635
6,862
8,705
5,496
19
(4,345)
(6,404)
(8,231)
(5,072)
17
OTHER
534
534
741
650
22
1,886
3,080
3,585
4,217
124
(1,351)
(2,545)
(2,844)
(3,567)
164

---

CRS-14
TRADE BALANCE WITH CANADA
TRADE
EXPORTS TO MEXICO (f.a.s. value)
IMPORTS FROM CANADA (c.i.f. value)
(exports minus imports)
WITH
%
%
chng
chmg
% chng
CANADA
1993
1996
1997
1998
93-98
1993
1996
1997
1998
93-98
1993
1996
1997
1998
93-98
ALL COMMODITIES
100,190
132,584
150,124
154,152
54
113,617
159,746
171,440
178,048
57
(13,427)
(27,162)
(21,315)
(23,896)
78)
MANUFACTURING
93,460
124,110
140,672
145,271
55
93,437
131,266
141,030
148,079
58
23
(7,156)
(358)
(2,808)
(12,309)
20—Food products
3,462
4,298
4,819
5,058
46
3,295
4,767
5,293
5,770
75
167
(469)
(475)
(712)
(526)
21—Tobacco
11
21
24
29
164
518
27
28
33
(94)
(507)
(6)
(4)
(4)
(99)
22—Textiles
1,254
1,725
1,999
2,089
67
497
931
1,105
1,229
147
757
794
893
860
14
23—Apparel
676
1,027
1,221
1,304
93
622
1,199
1,448
1,719
176
54
(172)
(227)
(415)
(869)
24—Lumber
1,165
1,330
1,653
1,619
39
6,638
9,204
10,118
10,369
56
(5,473)
(7,874)
(8,465)
(8,750)
(60)
25—Furniture
1,266
1,519
1,794
1,980
56
1,513
2,748
3,255
3,758
148
(247)
(1,229)
(1,461)
(1,778)
(620)
26—Paper
1,936
2,894
3,140
3,301
71
8,307
11,165
10,957
11,243
35
(6,371)
(8,270)
(7,817)
(7,942)
25
27—Printing
1,789
2,048
2,207
2,186
22
530
774
881
998
88
1,259
1,273
1,326
1,188
(6)
28—Chemicals
7,977
11,052
12,397
12,847
61
5,443
8,239
9,080
8,825
62
2,534
2,813
3,317
4,022
59
29—Petroleum
734
995
1,111
1,052
43
1,905
2,940
2,916
2,216
16
(1,170)
(1,945)
(1,805)
(1,164)
(1)
3X—Exprts, unident.
1,961
2,504
2,062
1,736
(11)
—
—
—
—
—
1,961
2,504
2,062
1,736
(11)
30—Rubbr & plast.
2,873
3,805
4,344
4,762
66
2,325
3,490
3,968
4,408
90
548
314
376
354
(35)
31—Leather
217
270
311
309
42
101
155
169
149
48
115
115
141
160
38
32—Stone, clay,glass
1,426
1,702
1,837
1,928
35
949
1,482
1,603
1,662
75
477
219
235
266
(44)
33—Primary metals
3,833
5,132
6,471
6,294
64
8,053
11,057
11,675
11,394
41
(4,220)
(5,925)
(5,204)
(5,100)
21
34—Fabricatd metls
4,911
4,965
5,538
7,585
54
2,044
3,443
3,731
4,216
106
2,867
1,522
1,807
3,369
18
35—Nonelec. mach.
16,038
22,360
26,263
26,619
66
6,881
10,357
11,085
12,041
75
9,157
12,003
15,178
14,578
59
36—Elec. machinery
12,369
17,446
18,993
19,738
60
4,988
8,167
8,872
9,729
95
7,381
9,279
10,121
10,009
36
37—Transprt. equip.
24,358
32,416
36,978
36,802
51
37,111
48,492
51,995
55,352
1,392
(12,752)
(16,076)
(15,017)
(18,550)
(190)
38—Scientific instr.
3,883
4,951
5,664
5,962
54
1,227
1,746
1,900
1,930
57
2,656
3,205
3,765
4,032
52
39—Misc.
1,321
1,653
1,844
2,070
57
491
884
949
1,038
111
830
769
895
1,032
24
AGRICULTURE
2,910
3,204
3,409
3,428
18
2,998
3,906
4,266
4,257
42
(87)
(701)
(857)
(829)
842
MINING
1,065
1,531
1,957
1,950
83
10,393
14,561
15,565
12,809
23
(9,328)
(13,029)
(13,608)
(10,859)
16
OTHER
2,755
3,738
4,087
3,503
27
6,790
10,014
10,579
12,903
90
(4,035)
(6,276)
(6,493)
(9,400)
133

---

CRS-15
TRADE
TRADE BALANCE WITH MEXICO & CANADA
WITH
EXPORTS TO MEXICO & CANADA COMBINED
IMPORTS FROM MEXICO & CANADA COMBINED
COMBINED
(f.a.s. value)
(c.i.f. value)
(exports minus imports)
MEXICO &
CANADA
%
%
chng
chng
% chng
COMBINED
1993
1996
1997
1998
93-98
1993
1996
1997
1998
93-98
1993
1996
1997
1998
93-98
ALL COMMODITIES
141,826
189,345
221,503
233,162
64
154,362
233,857
258,607
274,126
78
(12,536)
(44,513)
(37,104)
(40,964)
(227)
MANUFACTURING
132,556
176,422
207,978
219,795
66
125,286
192,301
212,603
230,833
84
7,270
(15,879)
(4,625)
(11,038)
(252)
20—Food products
5,458
6,298
7,203
7,888
45
4,236
6,266
7,026
7,786
84
1,222
32
177
102
(92)
21—Tobacco
33
59
47
40
21
522
38
53
44
(92)
(489)
21
(6)
(4)
(99)
22—Textiles
1,896
2,759
3,291
3,786
100
620
1,426
1,815
1,964
217
1,277
1,334
1,476
1,822
43
23—Apparel
1,843
3,013
3,732
4,270
132
3,089
5,907
7,773
9,465
206
(1,246)
(2,894)
(4,041)
(5,195)
317
24—Lumber
1,648
1,586
1,953
1,995
21
6,964
9,615
10,575
10,791
55
(5,315)
(8,029)
(8,622)
(8,796)
65
25—Furniture
1,962
2,046
2,444
2,769
41
2,429
4,300
5,175
6,048
149
(466)
(2,254)
(2,731)
(3,279)
604
26—Paper
3,312
4,715
5,203
5,599
69
8,419
11,411
11,240
11,566
37
(5,107)
(6,696)
(6,037)
(5,967)
17
27—Printing
2,052
2,389
2,536
2,566
25
605
964
1,104
1,256
108
1,466
1,424
1,432
1,310
(9)
28—Chemicals
11,013
15,625
18,029
18,916
72
6,254
9,692
10,708
10,423
67
4,759
5,933
7,320
8,493
78
29—Petroleum
1,547
2,156
2,735
2,556
65
2,531
3,371
3,262
2,543
0
(984)
(1,215)
(527)
13
(101)
3X—Exprts, unident.
3,500
4,612
4,737
4,977
42
—
—
—
—
—
3,500
4,612
4,737
4,977
42
30—Rubbr & plast.
4,505
6,430
7,658
8,627
91
2,692
4,201
4,867
5,475
103
1,813
2,228
2,790
3,152
74
31—Leather
414
512
630
669
62
452
684
787
745
65
(38)
(171)
(157)
(76)
100
32—Stone, clay,glass
1,790
2,180
2,398
2,563
43
1,567
2,498
2,743
2,991
91
223
(318)
(345)
(428)
(292)
33—Primary metals
5,724
7,928
9,709
10,103
76
9,342
13,846
14,815
14,897
59
(3,618)
(5,919)
(5,106)
(4,794)
33
34—Fabricatd metls
6,887
7,839
8,417
10,751
56
2,996
5,141
5,930
6,776
126
3,892
2,697
2,486
3,975
2
35—Nonelec. mach.
21,248
29,219
35,811
36,889
74
8,912
15,746
18,270
20,639
132
12,336
13,473
17,540
16,250
32
36—Elec. machinery
20,560
29,968
35,285
37,196
81
16,210
26,709
30,423
35,163
117
4,350
3,260
4,862
2,033
(53)
37—Transprt. equip.
29,471
38,110
45,337
46,100
56
43,557
64,106
68,967
74,168
630
(14,086)
(25,996)
(23,630)
(28,068)
(245)
38—Scientific instr
5,825
6,748
8,126
8,641
48
2,735
4,330
4,825
5,624
106
3,090
2,418
3,301
3,017
(2)
39—Misc.
1,868
2,230
2,698
2,903
55
1,154
2,050
2,245
2,469
114
713
180
454
434
(39)
AGRICULTURE
4,626
6,661
6,266
6,840
48
5,374
7,040
7,569
7,868
46
(747)
(379)
(1,304)
(1,028)
37
MINING
1,354
1,989
2,432
2,374
75
15,028
21,423
24,270
18,305
22
(13,673)
(19,434)
(21,838)
(15,931)
17
OTHER
3,289
4,273
4,827
4,153
26
8,675
13,094
14,164
17,102
97
(5,386)
(8,821)
(9,337)
(12,967)
141
Source of data: U.S. International Trade Commission. Website: http://Dataweb.usitc.gov.

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