9 billion, the highest level ever and the fourth record in five years under NAFTA (USDA, 1999:1). U.S. exports of soybeans, cotton, and rice all set new records. By value, more U.S. agricultural products went to Mexico in 1998 than to China, Hong Kong, and Russia combined (USDA, 1999:2). In the years immediately prior to NAFTA, U.S. agricultural products lost market share in Mexico as competition for the Mexican market increased. NAFTA reversed this trend. The United States now supplies more than 75 percent of Mexico's total agricultural imports, due in part to the price advantage and preferential access that U.S. products now enjoy.
In order to meet the new demand, the firms must hire new workers and increase investment. Between 1994 and 1997, 90 to 160 thousand jobs were created in the U.S. due to the increase of trade with Mexico, and 2.4 million jobs were dependent upon trade with Mexico and Canada (Harbrecht 12). The increase in employment and investment then leads to increased national income.
With all the good effects of NAFTA unfortunately there are some negative effects. One of the greatest impacts on the United States economy has been loss of jobs and decreased wages. Even though NAFTA has created jobs in the export sector, other production industries have moved their facilities to Mexico where wages are lower and operating costs are lower. The Washington, D.C. based Economic Policy Institute claims 263,000 U.S. jobs have been lost to Mexico because of "increasing net export deficits" since NAFTA began (Morgan, 1999:9). Also, wages in the United States have been held in check and in some cases lowered by the threat of job loss associated with companies moving to Mexico if employees were not willing to work for less benefits or wages. On a whole, it is perceived that workers rights have diminished somewhat because employers now can hire "cheaper labor". In the United States some wages are stagnating if not declining somewhat.
