s.
Unfortunately for the United States, the resulting loss of jobs in Canada dampened Canadian demand for American products. Therefore, the FTA had a relatively neutral impact on the American economy, while it has had a detrimental impact on the Canadian economy.
A free trade agreement with Mexico potentially permits American firms in large number to relocate their production facilities in Mexico to take advantage of lower costs of production รน primarily lower labor costs (Friedman, 1992). The Bush and Clinton Administrations presented this potential effect as beneficial because it lowered prices for American consumers. When large numbers of Americans lost their jobs in the process, however, the effect on the United States of free trade with Mexico was similar to the effects on Canada of the FTA. American firms gain to the extent that they are able to become more price competitive in international markets; however, these export gains accrue primarily to Mexico, not the United States, because it is the Mexican production of American firms which is exported.
To be fair, the Bush Administration and the Clinton Administration counted on a stronger Mexican industrial sector to increase its demand for American high-tech data processing equipment, capital goods, and capital. Such an increased demand is beneficial to the American economy, and it did result in employment growth in high-tech data processing equipment and capital goods production. When jobs are lost in other sectors of the American economy, however, most such
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