THE IMPACT OF NAFTA ON PRODUCTION AND EMPLOYMENT OPPORTUNITIES THROUGHOUT ALABAMA: 1993-2004

The objective of this paper is to evaluate the impact that NAFTA has had on the production of goods for export within the state of Alabama. Data listing the dollar volume of products exported from Alabama to Canada and Mexico from 1993 through 2004 are examined. Even with the decline in export totals leaving the state during the 2001-3 world recession, this study shows that Alabama’s exports to NAFTA countries have grown at a rate above that of exports to the rest of the world over the last eleven years with the largest rate of growth going to Mexico. In addition, by 2004 Alabama’s NAFTA to world export ratio had risen above its peak 1997 level. By applying U.S. Department of Commerce computational techniques, the study estimates that since 1994 approximately 13,500 new jobs with a net employment increase of about 9,600 jobs have been created in the state that can be directly linked to rising export volumes to NAFTA nations. The paper concludes that free trade under NAFTA has enhanced and improved production and employment opportunities throughout the state, albeit at an uneven rate, during the last decade