MAHONING VALLEY Study shows export growth with NAFTA

Two local union leaders say NAFTA is costing Valley jobs.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- For all its economic problems, the Youngstown-Warren metropolitan area has at least one thing to boast about -- its exports to Mexico and Canada have skyrocketed the past eight years.
The Shenango Institute for Public Policy, a western Pennsylvania think tank that studied the Mahoning Valley's export data, concluded that the region owes its export growth to the controversial North American Free Trade Agreement.
Better known as NAFTA, the agreement reduced or eliminated tariffs for exports in North America and stirred up a storm of labor protest when it took effect nearly eight years ago in January 1994.
But the Shenango Institute study concludes that the Youngstown metropolitan area has benefited greatly from the expanded trade opportunities NAFTA provides.
"I've done studies on NAFTA's effect in six states and looked at 40 different metropolitan areas, and the impact on Youngstown was among the most dramatic," said Paul Kengor, a co-author of the study.
"The Youngstown area gained $60 million in exports to Mexico and Canada under NAFTA. Without that boom, the area would have experienced a pronounced decline in its exports in the 1990s. The way I see it, exports to NAFTA countries literally rescued Youngstown's export base."
Increases: Based on data from the U.S. Department of Commerce, Youngstown-Warren business exports to Mexico jumped 105 percent and its exports to Canada climbed 53 percent since NAFTA took effect.
Though the Valley's exports to other nations showed an overall decrease, the study states, the high growth in imports to Mexico and Canada offset that drop. Researchers said the Valley exported $60 million worth of goods to its two largest North American neighbors between 1994 and 1999, the last year data were available.
Export growth was expected with NAFTA, said Reid Dulberger, executive vice president of the Youngstown/Warren Regional Chamber of Commerce, and he acknowledged that the increase in international sales likely helped to retain or create some jobs in the region.
In fact, he said the Valley actually exports more than it is given credit for because it is home to many parts suppliers. Their products go to manufacturers in other states to be used in goods that are later exported, he said, but the export credit goes to the final product maker.
Still, Dulberger said increased exports are "only part of the picture" when it comes to evaluating the value of NAFTA.
Downside: He said NAFTA opponents are right, too, in arguing that the agreement is causing job losses here.
By allowing business to move parts across the border without paying import duties, opponents argue, NAFTA has made it easier for companies to open plants in Mexico to take advantage of cheap labor.
That's why two area labor leaders were skeptical of the study's conclusion that the Youngstown area has benefited from NAFTA.
"If there's been a benefit, why are we losing so many jobs here and in Ohio?" asked Bill Padisak, recording secretary of the Greater Youngstown AFL-CIO.
Although he hadn't seen the study, Padisak said he would like to know more about what products are included in the region's export totals. "Maybe we've seen rising exports and fewer jobs because the goods that we're exporting aren't made here," he said. "It doesn't balance out."
Kengor said that although statistics listing the type of goods exported are available for each state, the information is not broken down for each metropolitan area.
Ohio's top export item is machinery, followed by motor vehicles, electrical machinery and plastics, according to the Ohio Department of Development.
Jim Graham, president of United Auto Workers Local 1112 representing workers at General Motors Lordstown Assembly plant, said he objects to NAFTA now as much as he did eight years ago when it was proposed.
"I know we're losing jobs to Mexico and other countries. Right now we're losing steel jobs left and right," Graham said. "NAFTA is bad for the average American worker. "
Study finds job losses: Policy Matters Ohio, an Ohio-based research institute, also concluded that NAFTA causes job losses. Its study, released in October, concluded that NAFTA has caused the elimination of 135,000 jobs across Ohio and 3 million nationwide.
"Ohio's historical legacy as a manufacturing state has made us especially vulnerable to job loss under these trade agreements," said Amy Hanauer, executive director.
Kengor, who conducted the study with Richard Phinney, a research associate with the Shenango Institute, maintains that job loss figures that opponents use to prove NAFTA is hurting the economy are not based on fact. He said institute researchers were unable to find any credible source of job loss figures tied directly to NAFTA.
An associate professor of political science at Grove City College and director of the Shenango Institute, Kengor said he first began researching NAFTA when he was studying for his doctorate at the University of Pittsburgh in 1996.
Areas studied: Besides the most recent study, which included the state of Pennsylvania and five metropolitan areas including Youngstown, he's studied NAFTA results for Michigan, Texas, Wisconsin, Florida and Arizona.
The Shenango Institute generally concentrates its research on a four-county section of northwestern Pennsylvania, Kengor said, but included the Youngstown-Warren area because of its proximity to that region. Study results show four other metropolitan areas included in the study -- Erie, Pittsburgh, Harrisburg and Philadelphia, Pa. -- all hit "record export levels" to Canada and Mexico under NAFTA.
Youngstown's biggest export customer is Canada, the study states, the United Kingdom is second, and Mexico has moved into third place since NAFTA.
vinarsky@vindy.com