Trade Data Center

One-stop shop for searchable trade databases, case lists & more

Eyes on Trade

Public Citizen's Global Trade Watch blog on globalization and trade. Subscribe to RSS.

Connect with GTW

Ballooning Trade Deficit Under the NAFTA-WTO Model

Prior to the establishment of Fast Track and the trade agreements it enabled, the United States had balanced trade; since then, the U.S. trade deficit has exploded. The pre-Fast Track period (before 1973) was one of balanced U.S. trade and rising living standards for most Americans. In fact, in 1973, the United States had a slight trade surplus, as it did in nearly every year between World War II and 1975. But in every year since Fast Track was first implemented in 1975, the United States has run a trade deficit. And since establishment of NAFTA and the WTO in the mid-1990s, the U.S. trade deficit jumped exponentially from under $100 billion to over $700 billion — over 5 percent of national income. The establishment of the extraordinary Fast Track trade procedure coincided with President Nixon’s decision to abandon managed exchange rates — the so-called gold standard — which had helped ensure balanced trade over time. In the new economy that would emerge from these policy shifts, companies that produce abroad (or produce nothing at all, in the case of finance) would replace domestic employment and rising wages as the driving force of economic policy. From Federal Reserve officials to Nobel Laureates, there is nearly unanimous agreement among economists that this huge trade deficit is unsustainable: unless the United States implements policies to shrink it, the U.S. and global economies are exposed to risk of crisis, shock and instability.

For more information on economic outomces under NAFTA- and WTO-style trade agreements, please refer to Public Citizen's backgrounder, Prosperity Undermined: Economic Outcomes During the Era of Fast Tracked NAFTA and WTO Model Trade Agreements. Also see our factsheets, Job-Killing Trade Deficits Soar under FTAs: U.S. Trade Deficits Grow More Than 440% with FTA Countries, but Decline 7% with Non-FTA Countries and Resources to Track Trade-Related Job Loss for Your State and District.

Copyright © 2014 Public Citizen. Some rights reserved. Non-commercial use of text and images in which Public Citizen holds the copyright is permitted, with attribution, under the terms and conditions of a Creative Commons License. This Web site is shared by Public Citizen Inc. and Public Citizen Foundation. Learn More about the distinction between these two components of Public Citizen.


Public Citizen, Inc. and Public Citizen Foundation

 

Together, two separate corporate entities called Public Citizen, Inc. and Public Citizen Foundation, Inc., form Public Citizen. Both entities are part of the same overall organization, and this Web site refers to the two organizations collectively as Public Citizen.

Although the work of the two components overlaps, some activities are done by one component and not the other. The primary distinction is with respect to lobbying activity. Public Citizen, Inc., an IRS § 501(c)(4) entity, lobbies Congress to advance Public Citizen’s mission of protecting public health and safety, advancing government transparency, and urging corporate accountability. Public Citizen Foundation, however, is an IRS § 501(c)(3) organization. Accordingly, its ability to engage in lobbying is limited by federal law, but it may receive donations that are tax-deductible by the contributor. Public Citizen Inc. does most of the lobbying activity discussed on the Public Citizen Web site. Public Citizen Foundation performs most of the litigation and education activities discussed on the Web site.

You may make a contribution to Public Citizen, Inc., Public Citizen Foundation, or both. Contributions to both organizations are used to support our public interest work. However, each Public Citizen component will use only the funds contributed directly to it to carry out the activities it conducts as part of Public Citizen’s mission. Only gifts to the Foundation are tax-deductible. Individuals who want to join Public Citizen should make a contribution to Public Citizen, Inc., which will not be tax deductible.

 

To become a member of Public Citizen, click here.
To become a member and make an additional tax-deductible donation to Public Citizen Foundation, click here.