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With Exports, NAFTA Benefits Ohio Workers Much More Than it Hurts

Monday, March 10, 2008 - 8:00pm

By LTG (Ret.) Daniel W. Christman

Trade has become a whipping boy in this year's electoral campaign. As the presidential contest got under way in Iowa a few short weeks ago, some candidates railed about the impact of trade on manufacturing jobs, pointing to a Maytag plant that recently closed, its jobs sent overseas.

But those jobs didn't go overseas; they came to Ohio. Whirlpool, which bought Maytag two years ago, chose to consolidate some of its newly acquired manufacturing facilities in the Buckeye State, adding hundreds of new jobs.

Facts are stubborn things, and so it is with trade in general and the North American Free Trade Agreement in particular. Contrary to what some of the candidates are saying, Ohio is benefiting from trade and from NAFTA in extraordinary ways, and no one more than the state's manufacturers.

To say so is not to dismiss the troubles Ohio manufacturers face; they are serious, and they have serious causes that federal and state officials must address. But the best doctor in the world can't write a proper prescription - let alone promise a cure - without a fact-based diagnosis.

So start with the facts. According to the U.S. Department of Commerce, 55 percent of all Ohio exports go to Canada and Mexico. For the nation as a whole, just 35 percent of exports go to our NAFTA partners. In other words, Ohio depends on exports to Canada and Mexico - markets open to Ohio products thanks to NAFTA - to a far greater degree than other states. Ohio's exports to Canada and Mexico have more than doubled since 1994, when NAFTA came into force.

The NAFTA market is especially important for Ohio manufacturers. According to the Bureau of Labor Statistics, a total of 777,000 Ohioans are employed in manufacturing. These workers produced $36.5 billion worth of exports in 2006. Exports to Canada and Mexico account for about $20 billion in Ohio's manufacturing output.

Do the math. Ohio manufacturers are bringing in export revenue of $25,000 for every factory worker they employ. The average manufacturing worker brings home a salary of about $42,000. How could Ohio manufacturers make their payroll without their huge and growing sales to Canada and Mexico? The short answer is, they couldn't.

Too often, arguments over trade miss the simple fact that "free trade" agreements like NAFTA are all about fair trade. Many people don't know that the U.S. market is already wide open to imports; our average duty on imports is about 2 percent. But countries such as Colombia and South Korea impose an average tariff on U.S. manufactured goods of 11 percent - just as Mexico did before NAFTA.

That's just not fair. It's as if the Cavaliers had to start a game down nine points from the tip-off. Luckily, the pending trade agreements with these two countries would put U.S. trade relations with these countries on a fairer, mutually beneficial footing. The U.S. Chamber of Commerce estimates the trade agreements with Colombia and South Korea could boost U.S. exports by more than $25 billion.

Saying no to trade deals is the wrong prescription for Ohio manufacturers. And ending NAFTA would be a disaster for the state's manufacturing workers. On trade, politicians campaigning for high office should remember the Hippocratic oath: First, do no harm.

Daniel W. Christman, an Ohio native, is senior vice president for international affairs at the U.S. Chamber of Commerce. He was superintendent of the U.S. Military Academy at West Point from 1996 to 2001.

- As published in The Cincinnati Enquirer, March 11, 2008