The Effects of the Free Trade Agreements and
Global Trade Deficits on the United States Economy in 2012.

© 2013

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United States Free Trade Agreements 2011.

Table of Contents

Executive Summary Introduction Domestic Manufacturing
Global Trade Oil China
Free Trade Agreements Combined Australia Bahrain
CAFTA-DR Costa Rica Dominican Republic
El Salvador Guatemala Honduras
Nicaragua Chile Colombia
Israel Jordan Morocco
NAFTA Canada Mexico
Oman Panama Peru
Singapore South Korea Trans-Pacific Partnership
Trans-Atlantic Free Trade Agreement Corporate Taxation Employment
Sources Data Miscellaneous

CAFTA-DR

Dominican Republic-Central America-United States Free Trade Agreement started negotiations in 2004. Involving Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, which is all but one country of Central America and Dominican Republic. We have Free Trade Agreements with these Central American countries for two reasons; to slow or stop immigration and illegal drug trafficking.

The idea was to open as many American factories throughout the region in an effort to quell illegal immigration into the U.S. The annual individual incomes in these ranges from $4,200 to $11,800, with the promise of these low paying manufacturing jobs the people would not be so inclined to immigrate to the U.S. This has been unsuccessful because most of the residents of these countries are aware that they can earn 10 times as much in the U.S. Illegal immigration from Central American has not dropped significantly, even under the current economic condition of the U.S.

The other unsuccessful reason was illegal drug production. If former low level producers were earning an honest income, they would change careers. This has failed as well because the income earned from producing cocaine is greater than working in a U.S. factory. Cocaine and marijuana are being imported into the U.S. at greater volumes now than a decade ago. These are being transported on the trucks carrying American products to the United States/Mexico border checkpoints and other covert locations.

The governments of our CAFTA-DR partners are all but helpless when it comes to these illegal activities. Under most circumstances low and mid-level personnel in the law enforcement agencies of these countries are corrupt and easily bribed, they can make more from the drug cartels and human smuggling rings than with their government salaries. Even the covert U.S. agency actions in cooperation with these countries have made little or no impact on these activities. As long as our law enforcement agencies continue to either ignore or not be funded properly illegal immigration and drug trafficking will continue to increase.

Failed policies of the many U.S. government agencies in the last decade have cost American tax-payers billions of dollars. These failed policies and activities have actually helped to increase the illegal drug trade into the United States. One of these was called "Fast and Furious" conducted by the Department of Drug Enforcement; this mismanaged program may have put millions of dollars of military weapons into the hands of drug cartels. Added to this and other activities by the U.S. government, our exports to the CAFTA-DR countries have helped as well. As the top 20 list of our mostly non-agriculture products and product groups will show, American corporations are also helping with the illegal drug trade. Depending on individual perspective and interests, illegal immigration has both advantages and disadvantages. The cost of enforcement within the country exceeds the cost the maintaining our borders. Because of all of the state and federal agencies involved, the actual cost to tax-payers is short of impossible to calculate. As a result of the limited budget by Congress, border enforcement is not provided adequate funding. Both are important to help alleviate the initial crime of entering the United States illegally but also to help with subsequent crimes involving persons and property. Most illegal immigrants, in an effort to prevent deportation, are not likely to commit these crimes. Hiding in plain sight is how most have avoided detection and being caught.

There are some groups that claim that illegal immigrants take jobs from other Americans. This is not in fact the truth. Many illegal immigrants find employment in agriculture; not as equipment operators, warehouse managers or truck drivers, but as manual harvesters. The delicate nature of many fruits and vegetables prevents mechanical harvesting so illegal immigrants have found a niche in doing jobs that most Americans won’t. Some states have passed anti-immigration laws that have forced many orchard and farm workers to friendlier states. Those states have heard from the agricultural industry and the loss of income that farmers have lost. Due to the lack of willing Americans to do the work, the future of smaller fruit and vegetable growers is at risk of ending family operations. Without an accurate population assessment of illegal immigrants, the actual number of those harvesting fruits and vegetables will never be known. The U.S. Department of Agriculture gives an estimate of 70% of farm workers are illegal immigrants. According to the Bureau of Labor Statistics, 228,600 people are employed as farm workers, however, assuming that most if not all illegal immigrants participate in the surveys, the real number may be closer to 762,000 with 533,400 being illegal immigrants. This assumption is based on the "hiding in plain sight" theory.

According the U.S. Trade representative, the CAFTA-DR has increased our agricultural exports. The data does not support that claim. The fact is that we have increased our imports of agricultural products year-over-year at a greater rate than our exports have grown.

Agriculture Product Agriculture Imports Agriculture Exports Agriculture Trade Balance
Corn 51,410,895 1,008,552,250 957,141,355
Cotton, raw 2,306,627 146,799,668 144,493,041
Dairy products and eggs 14,869,398 121,716,525 106,847,127
Fish and shellfish 392,155,533 32,246,849 359,908,684
Fruits, frozen juices 2,021,255,429 135,065,071 1,886,190,358
Meat, poultry, etc. 215,415,943 331,257,507 115,841,564
Nuts 97,858,837 20,147,250 77,711,587
Rice 340,450 189,272,080 188,931,630
Sorghum, barley, oats 6,187,260,223 701,893 6,186,558,330
Soybeans 6,187,260,223 139,458,432 6,047,801,791
Tobacco, unmanufactured 27,720 109,348,219 109,320,499
Vegetables 391,886,553 121,293,515 270,593,038
Wheat 373,109,588 619,914,789 246,805,201
Totals $15,935,157,419 $2,975,774,048 $12,959,383,371

Finished and raw food products not listed on the previous page were not exported to the CAFTA-DR countries. Most of the top 20 CAFTA-DR imported products for 2011 were American brands. Most U.S. companies contract the work with factory owners, there is no accountability to the several governments as to who may or not be associated with drug cartels. This is not to say that these companies and their contracted factories have such associations, the amount of legal income could easily be attractive to those who may want to fund illegal activities.

Almost all of the non-food products imported were finished using raw and partially finished materials exported to the CAFTA-DR countries, much of which would have been transshipped from China by U.S. corporations.

Product Group CAFTA-DR Imports FTA Imports Percent of FTA Imports
Semiconductors and related devices 6,187,260,223 13,653,399,129 45.93%
Apparel and household goods-cotton 5,230,001,844 9,157,784,740 21.75%
Apparel and household goods-other textiles 2,661,126,446 5,864,279,108 27.06%
Fruits and preparations, including frozen juices 2,021,255,429 7,818,087,949 40.12%
Green coffee 1,486,369,899 3,583,300,055 24.36%
Other scientific, medical and hospital equipment 1,294,016,473 9,765,547,908 13.81%
Nonmonetary gold 1,039,523,048 13,780,797,834 6.47%
Other parts and accessories 904,390,351 43,142,205,742 30.74%
Other products (notions, writing and art supplies) 625,228,668 5,161,347,700 4.26%
Electric apparatus and parts, n.e.c. 595,444,514 13,802,623,354 1.26%
Cane and beet sugar 447,609,374 1,914,061,686 32.95%
Fish and shellfish 392,155,533 4,866,763,735 9.32%
U.S. goods returned, and reimports 391,886,553 16,325,594,455 2.49%
Vegetables and preparations 373,109,588 7,800,451,843 26.79%
Crude 314,051,487 125,114,424,632 6.70%
Jewelry (watches, rings, etc.) 276,413,776 1,182,753,231 3.94%
Minimum value shipments 251,152,250 4,896,067,953 1.34%
Footwear of leather, rubber, or other materials 249,150,375 734,829,362 33.91%
Other (clocks, port typewriters, oth household gds 245,479,937 16,848,119,313 4.25%
Meat products, poultry, and edible animals 215,415,943 5,929,051,956 29.80%

These are the top 20 exported American products that were exported from most of our other non-FTA trading partners for 2010 from CAFTA-DR. Just like our other trade partners, FTA and global, we exported more raw and partially finished products to be returned as finished American products. For example, we exported almost $2 billion worth of cotton fabric that was imported from other countries, which was returned as just over $5.2 billion in American branded clothing. Other foreign made American products that we exported were computer accessories, cars and light trucks and other industrial supplies to the factories making American branded products.

Corn and wheat were the only agricultural products in the 20 exports to the six countries combined; this is a direct indication that the intended trade products are not a priority to the countries involved, including the U.S.

Product Group CAFTA-DR Exports FTA Exports Percent of FTA Exports
Fuel oil 3,411,800,615 25,020,968,937 13.64%
Petroleum products, other 3,133,199,262 35,837,943,882 8.74%
Cotton fiber cloth 1,987,125,155 2,900,330,839 68.51%
Minimum value shipments 1,084,232,286 14,084,425,703 7.70%
Manmade cloth 1,051,078,234 4,001,705,384 26.27%
Corn 1,008,552,250 6,717,129,711 15.01%
Plastic materials 912,741,465 18,408,120,336 4.96%
Electric apparatus 809,524,419 21,267,718,818 3.81%
Newsprint 735,282,691 8,362,004,525 8.79%
Semiconductors 716,914,891 16,346,164,818 4.39%
Pharmaceutical preparations 643,899,747 9,654,905,495 6.67%
Passenger cars, new and used 623,627,082 19,154,245,716 3.26%
Wheat 619,914,789 3,408,512,244 18.19%
Natural gas liquids 609,477,262 2,830,079,435 21.54%
Medicinal equipment 493,673,110 8,641,382,598 5.71%
Other industrial supplies 479,257,119 13,970,907,794 3.43%
Computer accessories 472,652,152 19,083,816,646 2.48%
Apparel, household goods - textile 469,278,674 4,006,488,865 11.71%
Animal feeds, n.e.c. 455,582,387 3,208,118,355 14.20%
Other household goods 415,574,158 8,381,979,897 4.96%

The highest relational percentage of our total FTA imports was 3.93% in 1998, and 4.41% in 2008 which was also the year of our greatest surplus of just over $6 billion. Our exports to CAFTA-DR for 2011 ended at almost $2.2 billion surplus, or almost 1.25% of our total FTA exports. As with all of our trade, trans-shipment of products from China, Mexico and Canada contributed to our trade surplus with CAFTA-DR treaty.

Our overall trade within CAFTA-DR is negligible relative to the rest of our Free Trade Agreements. The only year that we had a trade surplus with our combined FTAs, 1992, was the only year the future CAFTA-DR countries had a significant portion of these treaties at almost 9.8%. Except for three other years, most were below 5%, generally between 1/2% and 3%.

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Import/export data for Global Trade can be obtained from:
Census Bureau - Foreign Trade.
Department of State - Countries and Other Areas
United Nations Office on Drugs and Crime - Colombia: from illicit drugs to sustainable livelihoods.
University of California, Merced - Susan M. Richter, Economics, College of Social Sciences, Humanities, and Arts
The Christian Science Monitor, By Mark Guarino, Staff writer, October 22, 2011 - Anti-illegal immigration bill stokes backlash in Alabama fields
WONKETTE, by Kirsten Boyd Johnson, June 23, 2011 - Crops Rotting In Georgia Since Illegal Alien Farm Workers Fled State
CNN - By Aaron Smith, staff writerJuly 10, 2010- Farm workers: Take our jobs, please!