April 19, 2008
The Danger of the Democrats Rhetoric...
Playing fast and loose with free trade
By: Helle Dale
March 12, 2008
The longer the Democratic primaries go on, the more we learn about Hillary Clinton and Barack Obama. This is obviously a very useful process. During the Ohio primary, for instance, we learned that both Mrs. Clinton and Mr. Obama want to tear up the North American Free Trade Agreement. This was certainly startling news to both the Mexicans and the Canadians, though it obviously played well in Ohio where manufacturing jobs have been in decline.
Mrs. Clinton, who normally likes to take credit for her husband's policies, is renouncing his legacy on free trade, one of the policies Mr. Clinton did get right. In fact, NAFTA was signed by Bill Clinton and heavily supported by Republicans. "I will say that we will opt out of NAFTA unless we renegotiate it, and we renegotiate on terms that are favorable to all of America," she promised voters in Ohio.
Mrs. Clinton has even called for a moratorium on all free trade agreements (FTAs), which would jeopardize presumably not just bilateral FTAs, but also the Doha Round of the World Trade Organization, which would probably mean the end of the organization. It would do huge damage to U.S.-European relations as well as relations with developing work countries who are seeking entry into U.S. and European markets for their products.
Mr. Obama's position, meanwhile, is not nearly as clear. After his stating in Ohio "that we will opt out unless we renegotiate the core labor and environmental standards," one of his economic advisors, Professor Austan Goolsbee of the University of Chicago, subsequently let the appalled Canadians know that Mr. Obama actually didn't mean what he had said.
According to a memorandum written by a Canadian political and economic affairs consular officer, Mr. Goolsbee assured them that Mr. Obama's statements were "more reflective of political maneuvering than policy."
It was even reported by Canadian television that an advisor to Mr. Obama had called up the Canadian ambassador to warn him that Mr. Obama would ratchet up his attacks on NAFTA. Mr. Obama has hotly since denied that his campaign is speaking out of both sides of its mouth on NAFTA.
Pandering to the voters is good old-fashioned populism, and perhaps to be expected in an electoral campaign. But the two Democratic candidates are playing fast and loose with one of the biggest engines of economic growth we have: free trade.
NAFTA has been a huge boon to the United States as well as its trading partners to the north and south. Mexico is the second largest trading partner of the United States. Between 1993 and 2006, imports from Mexico rose from $48 billion to $216 billion, and at the same time, exports from the United States rose from $52 billion to $156 billion. That trade represents jobs created on both sides, which again means that the Mexicans employed in those jobs will not have to come across the U.S. border in search of employment.
Meanwhile Canada is the largest oil exporter to the United States. Some Canadian officials have let it be known that renegotiating NAFTA may not be such a bad idea in the light of $100-plus per-barrel oil prices.
Republican candidate Sen. John McCain has lost no time pointing out the dangers of the positions taken by his two Democratic competitors. In Texas, he reminded a town-hall audience that Texas has benefited hugely from exporting to both Canada and Mexico. And beyond that, Mr. McCain said, trade and national security are interconnected. Canada currently has 2,500 soldiers in Afghanistan, serving along U.S. troops. Canadians, like Australians and Brits, are the most reliable U.S. allies in times of crisis. Mr. McCain is suggesting that if we tear up NAFTA after more than a decade, Canadians might not feel obligated keep their end of the bargain in Afghanistan.
Ironically, by attacking NAFTA, the two Democrats are making common cause with some from the Buchanan wing of the Republican Party who fear NAFTA and a putative North American Union, which the Bush administration is said to be secretly working on. Both parties neglect the tremendous benefits derived by Americans from cooperation with the two neighbors of the United States, both in trade and national security.
Copyright 2008 - The Washington Times