NAFTA's impact on Long Island
The North American Free Trade Agreement was a cause célèbre in the early 1990s.
Presidential candidate H. Ross Perot warned a "giant sucking sound" would be heard as U.S. jobs went to Mexico.
Proponents of the trade pact, which encompasses the United States, Canada and Mexico, predicted an enormous economic boost as cross-border commerce swelled.
On Long Island, where defense plants were already shrinking, the debate between unions opposed to the deal and business groups that favored it mirrored the national argument.
Now, two decades after NAFTA was implemented, experts said, it's clear on the Island and across the country that free trade had an enormous effect on specific workers and companies. But overall the impact has been subdued.
"NAFTA did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters," the nonpartisan Congressional Research Service said last year. "The net overall effect of NAFTA on the U.S. economy appears to have been relatively modest."
In Nassau and Suffolk counties, at least 3,134 people have received pink slips since 1994 because manufacturers shifted production to Mexico or Canada, according to a Newsday review of government documents certifying the workers were eligible for retraining funds because they had lost their jobs to trade. More than 85 percent of those positions went to Mexico.
During the same two-decade period, state data show local factory payrolls shrank by 33,800 jobs for a variety of reasons, ranging from trade to mergers to changing business patterns.
Exports from New York State businesses to Mexico more than tripled between 1993 and 2012 to $2.6 billion, according to the most recent figures from the U.S. Census Bureau. (Long Island numbers weren't available.)
But that's peanuts compared with $15 billion in exports from New York to Canada in 2012, and the $1 trillion value of all goods and services produced in the state.
"Free trade is generally a positive to the economy," said John A. Rizzo, chief economist at the Long Island Association business group. "But there are costs and benefits. It's not a slam dunk."
Rizzo and others said 1994's NAFTA, the 1989 Canada-United States Free Trade Agreement and subsequent pacts have increased competition in the U.S. marketplace.
Prices have fallen on some goods and services, and the merchandise on store shelves is more varied. But certain domestic companies have struggled, and some have shifted work to lower-cost countries and terminated better-paid U.S. workers.
NAFTA changed everything for a Ronkonkoma-based garment maker and a young engineer in 1995, a year after the trade agreement went into effect.
Lakeland Industries Inc. has had great difficulty for years in finding seamstresses to produce its protective clothing used in industry, health care and emergency response. In the 1970s, it moved sewing jobs off Long Island to Alabama.
COULDN'T HIRE IN U.S.
Chief executive Christopher Ryan said NAFTA led to the opening of a plant in Mexico in 1995 that now employs 250 people. He said the money saved in labor costs went to buy new equipment for the Alabama plant and to boost hiring there as sales increased.
Lakeland has 150 workers in Alabama, 40 in Pennsylvania, 100 in Brazil and 1,100 in China. Eight people work at the Ronkonkoma headquarters.
"Everybody says, 'Oh, we are losing jobs to Mexico,' " Ryan said. "Believe me, we couldn't hire anybody in the United States to do sewing, and we still can't."
Yet, Mexico offers more than reduced wage rates.
He said its proximity to the United States means lower shipping costs and quicker delivery than China can offer. Plus, products made in Mexico aren't subject to import taxes charged by Argentina, Brazil, Uruguay and Venezuela because Mexico has free trade agreements with those nations, which the United States and China do not.
"We wouldn't be in business today without NAFTA, because we wouldn't have been competitive," said Ryan. "Most of my competitors from the 1990s are now out of business."
A CHANGE OF CAREERS
NAFTA helped to turn James J. Lillie's world upside down for a while in 1995-96.
The industrial engineer was laid off in August 1995 after more than seven years at Ademco, the maker of fire and security alarms then based in Syosset. He said he was among 65 people fired that summer day because of NAFTA and the company's drive to reduce its manufacturing costs.
"I was dumbfounded . . . It didn't make any sense, because I had gotten a promotion a few months earlier," said Lillie, who at the time was newly engaged to his wife, Donna.
Lillie soon landed a job at the Jolly Rancher candy factory in Denver but had been there less than three weeks when the owner announced plans to close a different plant and sell off another. In January 1996, Lillie eagerly started attending law school at St. John's University in Queens.
"NAFTA was a natural progression for the economy that needed to happen, even though I might have been a casualty of it," said Lillie, who at 49 is now a patent attorney in Ronkonkoma. "In hindsight, the best thing that ever happened to me was for them to let me go, because it pushed me to change."
His former employer, Ademco, and its successor, Honeywell Security in Melville, shed 917 local jobs by moving production to Mexico in the past 20 years, according to approved applications for the federal Trade Adjustment Assistance program.
Ademco/Honeywell had the most NAFTA-related layoffs, followed by the 520 at Symbol Technologies in Bohemia and Holtsville, and 300 at Condor PC Power Supplies in Brentwood.
"These were good-paying jobs, the kind that you can support a family on," said Roger Clayman, executive director of the Long Island Federation of Labor. "NAFTA has led to the decline of manufacturing on Long Island."
Lisa Tyson, director of the Long Island Progressive Coalition, agreed, saying fewer jobs at factories and more at stores and other service businesses have caused an exodus from Nassau and Suffolk counties as people no longer have the earnings to pay mortgages and tax bills here.
The coalition, together with local unions, environmentalists and peace groups, have been demonstrating against the Trans-Pacific Partnership, a proposed free trade agreement between North America and nine countries including Japan, Malaysia and Vietnam.
A HISTORIC PACT
Twenty years ago, NAFTA was considered historic because it was the first trade deal between two developed nations and a developing one -- previous pacts were between developed nations only.
NAFTA's supporters said recently that it created many jobs in research and development, high-tech manufacturing and sales -- enough to offset the loss of low-skilled production jobs.
"We didn't get the big sucking sound that Ross Perot was talking about, and to the extent that we lost jobs, it was not just because of free trade but a lot of reasons," said Gary Sazer, a Mineola attorney who co-founded the 1990s advocacy group Long Islanders for NAFTA.
Exports from New York State businesses to Canada and Mexico climbed 107 percent between 1993 and 2012 to $18 billion, according to the latest federal statistics. Data on imports wasn't available for the same period, but in 2012 they totaled $19 billion in Canadian goods and $3 billion in Mexican goods.
The 31-county metropolitan region that includes Long Island trades about $31.5 billion in goods with Canada and Mexico each year, said Joseph Parilla, a research analyst at the Brookings Institution, a nonpartisan think tank in Washington. The region placed first in trade with Canada and fourth with Mexico among U.S. metro areas.
The New York region's biggest import, in dollar terms, is energy, and its biggest export is pharmaceuticals and chemicals.
Anticipating more sales of its rapid tests for HIV and syphilis to Mexico and other foreign countries, Chembio Diagnostics Inc. has boosted its Medford workforce to 210 and recently rented additional space in Holbrook.
Mexico accounted for less than 5 percent of the company's sales of $29.6 million in 2013. But the country is expected to grow in significance now that a combination HIV-syphilis test has been approved for sale.
"We've been very successful in providing our products to a number of public health initiatives in Mexico," said Lawrence A. Siebert, who retired last week as Chembio's chief executive. "It's a very large country with huge needs . . . We're anticipating a very strong year with Mexico."