Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Tuesday, July 18, 2017

Trump's quest to renegotiate NAFTA might be comparable to Brexit

The reality of "Brexit" is that the UK's economy is integrally tied to Europe, and "getting out" of the EU and the old Common Market is disadvantageous in many ways.  With manufacturing it involves the fact that most companies have tightly integrated supply chains that cross borders.

President Trump has initiated renegotiation of the North American Free Trade Agreement because he believes it is disfavorable to the US ("Trump administration unveils goals in renegotiating NAFTA," Washington Post).

Comparable to how most UK newspapers weren't and aren't all that honest about the UK's place in Europe--the wealthy and conservative newspaper owners favored Brexit so as a result so did the coverage of their newspapers--I think that we might get better coverage of this issue from Canadian and Mexican newspapers.  Not because the US papers are dishonest, but because NAFTA might matter more to the counterparties, and this is reflected in media coverage and the depth of reporting.

For example, this article, "Canada has a secret weapon in the coming NAFTA talks" from the Toronto Globe and Mail is far more detailed than the Washington Post article cited above.

Also see the TGM article, "What the US wants from NAFTA talks." (Although the Post has more detailed follow up coverage.)

El Universal, a major daily in Mexico City, has extensive coverage, including "Canadá y México conversarán sobre renegociación del TLCAN."

I finally read the book A Prayer for the City, the story of Ed Rendell's mayoralty in Philadelphia, from 1991-1999, although the book covers the period up to early 1997.  The reality is that most of what Mayor Rendell had to deal with was the closure of much of the city's manufacturing base, including the Philadelphia Navy Yard, which had 8,000 direct employees.

One of the stories the book recounts is a meeting with Kraft, the firm that bought Breyer's Ice Cream, a firm founded in Philadelphia.  Because of various lines of ice cream business, the company had far more manufacturing capacity than demand, and the Philadelphia plant was the oldest and least efficient, with multiple floors, while newer plants were one story and had less congested transportation connections. 

Kraft wasn't interested in incentives to keep the plant open, they would have wanted a new plant on a single floor, but they had no need for one.  Had Philadelphia given them incentives, it would have been $60 million or more, for 50 jobs.

As the TGM article makes clear, while US manufacturing employment has dropped significantly, manufacturing output has not because of continuous and significant capital investment in automation and digitization, abetted by the fact that as long as interest rates are so low, it's cheaper to invest in capital than in labor.

In short, mass production is "mass" in terms of output, but not in terms of labor requirements and a source of employment.

Thinking about US manufacturing is more complicated by the fact that more firms are not US owned are major producers.

For example, auto output by Ford, GM, and Chrysler has dropped, but plants owned by BMW, Honda, Nissan, Toyota, and Mercedes and other firms have been added to the mix so that overall production is not down.

This has changed the geography and organization of various manufacturing sectors so that the South is a more significant center of production compared to the past, when the North/Midwest was the nation's "Industrial Heartland."

-- Industry Week magazine



At 10:10 AM, Blogger Richard Layman said...

wrt a better brexit negotiating process



The point of the column is that Brexit has to happen because that's how people voted, that the politics of that will come back were it to be repudiated, etc.

I guess it's similar to how people still support Trump, even though like how people blamed the EU for austerity and voted for Brexit, people voted for Trump out of feeling left out, but the deregulatory/anti-government policies of the Trump Administration hurt these people far more than help them.


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