About 9 out of 10 manufacturing jobs lost in the U.S. have beeneliminated by mechanization, not trade.*

*Hicks and Devaraj (2015)

A NAFTACASE STUDY

TRADE, MANUFACTURING &UNEMPLOYMENT IN THE U.S.

NAFTA is responsible for thedecline in U.S. manufacturing jobs.

Technological progress and enhanced productivity – not NAFTA – has been responsible for the downturn in manufacturing jobs in the U.S. over the past several decades.

Manufacturing jobs in the U.S. peaked in 1979 and have since slid by 37% to levels not seen since the 1940s, even though today’s economy-wide labour force is three times larger than it was 75 years ago.

NAFTAMYTHDEBUNKED

The decline of manufacturing jobs in the U.S. started in the 1950s, long before therise of NAFTA. The decline has followed a straight line that has remained unchanged despite

the creation of a number of international trade agreements over the following decades.

Despite the decline in manufacturing jobs, technological innovation is likely helpingto retain industrial production in the U.S. that has been lost elsewhere.

MYTH:

FACT:

1940 2017

1995

1994 2001

Conclusion of theUruguay Round of

global tradenegotiations &the advent of

NAFTA

China’saccession

to the WTO

Creation of theWorld TradeOrganization

(WTO)

U.S. manufacturingemployees (Left hand axis)

Manufacturingas share of allemployees (Right hand axis)

Manufacturingindustryemployment

Real manufacturingvalue added

DECLINE OF U.S.MANUFACTURINGJOBS

MANUFACTURINGVALUE ADDED& EMPLOYMENT,SHARE OF U.S. TOTAL

Sources: Scotiabank Economics, Haver Analytics.

Sources: Scotiabank Economics, Haver Analytics.

Most high-income economies and even some developing countrieshave seen a similar slide in manufacturing jobs.

20

18

16

14

12

10

8

6

4

2

0

mns of people

40 50 60 70 80 90 00 10

% of total

40

32

24

16

8

0

50

45

40

35

30

25

20

15

10

5

0

50 55 60 65 70 75 80 85 90 95 00 05 10 15

% of total