April 19, 2008
NAFTA-bashing is baseless...
Obama's Border Incident
March 4, 2008; Page A16
Barack Obama says he'll revive the art of American diplomacy, which sounds nice. We're not sure how this promise squares, however, with the diplomatic incident his campaign has caused in Canada, of all unlikely places.
Last week, Canada's CTV television network reported on a leaked memo from a Canadian diplomat casting doubt on Mr. Obama's sincerity. The memo reported that Mr. Obama's chief economic adviser, University of Chicago professor Austan Goolsbee, had told Canadian officials that Mr. Obama's vow to unilaterally withdraw from the North American Free Trade Agreement was simply campaign rhetoric aimed at Ohio primary voters. This week, Mr. Goolsbee said that's not what he meant at all when he attended a February 8 meeting at Chicago's Canadian consulate. Perhaps something got lost in translation.
Mr. Goolsbee maintains that he did say that Mr. Obama recognizes the benefits of free trade. But, Mr. Goolsbee adds, he also emphasized that Mr. Obama's objective is to strengthen Nafta's labor and environmental provisions. The accommodating Canadian Embassy nonetheless tried to smooth things over yesterday with a statement saying that "there was no intention to convey, in any way, that Senator Obama and his campaign team were taking a different position in public from views expressed in private, including about NAFTA." Which is too bad, because the apparent revelation that Mr. Obama doesn't believe his own trade rhetoric is the best news we've heard about the Illinois Senator's economic policy.
In Mr. Goolsbee's defense, we too have recognized a language barrier separating the U.S. and Canada, particularly when we enjoy watching NHL games on television. In their understated manner, Canadian analysts describe blows to the head as "messages" and sticks to the face as "taking liberties." So perhaps Mr. Goolsbee's obligatory nod toward the benefits of trade was interpreted in Canada as a passionate defense of free markets.
However, if the Chicago professor was in fact sending a signal that Mr. Obama does not really intend to destroy America's largest trade relationship, we can only say, "Kick save, and a beauty!" Leaving Nafta alone would be great news for Ohioans in particular, as the Cato Institute's Daniel Griswold recently noted. Canada and Mexico buy more than half of Ohio's exports, and since Nafta's 1993 enactment the U.S. economy has added a net 26 million new jobs. The average real hourly compensation (wages and benefits) of workers has climbed 23% and real median household net worth has increased by a third.
We suspect Mr. Goolsbee knows all of this, because the benefits of free trade are one of the few things that economists of the left and right agree on. The Commerce Department reports that while countries with which we enjoy free trade agreements generate only 7.5% of global GDP, they consume more than 42% of U.S. exports.
And along with importing our products, countries seeking open trade with America are also required to embrace the rule of law as a condition for such agreements. Colombia's inspiring progress shows that foreign policy benefits may exceed even the economic gains. But a rejection of the pending Colombian free trade deal, a rewrite of Nafta, and a literal embrace of Mr. Obama's campaign rhetoric would send a disastrous signal over our borders, north and south. Here's hoping Canadian officials heard Mr. Goolsbee correctly the first time.
Copyright 2008 - The Wall Street Journal