I see that BHO is against NAFTA, as seems to be the left in general. Does anyone know how the NAFTA is thought in Canada and Mexico, and what how the suport or opposition there breaks down along party lines?
Not really after a debate, but I figure once I write “Obama” and “Nafta” a debate is probably inevitable.
A lot of Mexican farmers have been put out of work because of NAFTA, so they obviously don’t like it, but I don’t know which party they tend to belong to. As a result, it has led to more migration to urban centers, increasing poverty, and more illegal immigration to the U.S.
Canada’s two major parties both support NAFTA, as well as one of the two large marginal parties. Popular support depends where you are and what your personal situation is.
Obama’s website says this:
Amend the North American Free Trade Agreement: Obama believes that NAFTA and its potential were oversold to the American people. Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.
This doesn’t seem quite like opposition to me, but I’m a few news cycles behind. Do you have a more pertinent cite?
Well, I’m from Canada. But I live in the EU, where free trade is the real deal – to a very significant extent, the barriers to goods crossing national borders have been removed.
Back home, NAFTA was a big issue at first, with fears of massive job losses to the much larger US economy. Of course, we’d already had a bilateral agreement with the US for some time. In any case, I gather the conventional economic indicators show a net positive result for Canada from NAFTA.
But there’s been a recent development that’s got a lot of attention – recent in that it really came to a head over the last few years. Among Canada’s important exports is wood. We’ve got a whole lot of forests, and the stuff grows on trees, so we export plenty of it to the US. A few years ago the US imposed duties on Canadian softwood lumber, which for a few reasons (chiefly the large supply and its presence on huge tracts of land that isn’t privately held) is cheaper than US softwood. The details are explained here.
Naturally, this was a mess for the Candian lumber industry, which was used to exporting a hole pile of wood to the US housing market. Mills closed, single-industry towns became no-industry towns, etc. It was national news for months. Then years. Years, because Canada brought the issue to NAFTA’s dispute-resolution mechanism. Not once, but several times, because though the body repeatedly found in favour of Canada, the US government simply refused to abide by the rulings. And kept its tariffs in place. Canada would lose more than it would gain from a trade war, so we basically had nothing to do but roll over and take it.
The perception of – well, I was going to say ‘many’, but I don’t have any polls to cite, so let’s just say ‘some’ – is of a one-sided situation. We sign agreements with the US, but these don’t matter, because Washington can do whatever it pleases, and will, particularly if there’s a domestic industrial lobby to be answered to. This perception was reinforced by the impression that the US wasn’t playing fair with its response to the discovery of BSE in some Canadian cattle, in an industry so trans-border integrated that individual animals often cross the border more than once in their life cycle.
How many Canadians think that way? I don’t have a number, but I’m sure there’s plenty of people in lumber towns who are grouchy. But what can we do? The US is the destination of some three-quarters of our exports, so it’s not like pulling out of the free-trade arrangement would do us any good. And a new agreement doesn’t matter either, since Washington can’t be expected to obey it, OR the findings of so-called binding dispute resolution mechanisms.
Over here in United Europe, there’s no single giant country that can dominate the rest of the trading bloc. Oh, sure, France and Germany outweigh Malta and Slovenia, but none can individually run off in violation of the agreements and know there’s nothing the others can do about it. I see a lot of advantages to the EU, but he history of ‘free trade’ is one of the reasons I don’t want to see a similar continental arrangement in North America.
Will a new President, in particular one who thinks NAFTA hasn’t been beneficial enough for the US, help our position? I’m dubious.
Anyway, there’s the opinion of one Canadian. As for party lines, RickJay’s assessment above is the case. No major party calls for an end to NAFTA, though everybody has different ideas about Canada-US relations.
I’m aware of this situation, and I agree with Canadians’ interests regarding lumber. NAFTA has become the toy of the US. It has to be re-arranged.
Wolfstu – thanks for that; exactly the kind of thing I was looking for.
Guizot: My research has shown me that Mexicans have benefited from Nafta – can you refer me to your resources.
Maybe I overinterpreted this:
“It’s a game where trade deals, like NAFTA, ship jobs overseas and force parents to compete with their teenagers to work for minimum wages at the local fast-food joint or at Wal-Mart. It’s what happens when the American worker doesn’t have a voice at the negotiating table, when leaders change their positions on trade with the politics of the moment, and that is why we need a president who will listen not just to Wall Street, but to Main Street, a president who will stand with workers not just when it’s easy, but when it’s hard, and that’s the kind of president I intend to be when I’m president of the United States of America.”
Ellipsis mine.
I know I’m being a bit pedantic here, but shouldn’t we all question the wisdom of someone who actually appears to be saying that the North American Free Trade Agreement ships jobs overseas?
The problem with arguments against NAFTA is that the alternative, which is no agreement, is obviously going to have even more drawbacks. There isn’t any recourse for the Canadian timber industry without NAFTA than there is now with. There isn’t anything that will magically make the heavy industries of upstate New York competitive again.
I find it a bit shocking that, of all the people in the world, the citizens of Canada, Mexico and the United States, which are far-flung federations, would not see how damaging barriers to trade can be. Whatever state or province you’re living in, just do a thought exercise and imagine that your state or province were to suddenly erect all the trade and movement barriers that exist between most countries. If you live in the Commonwealth of Pennsylvania you’re not allowed to move to Maryland without an application process that goes on for years. The business you work for suddenly has to pay a massive tariff on anything it sells into the State of New York. Everything produced anywhere else in the United States that you want to buy is subject to tariffs when it enters Pennsylvania, jacking prices up across the board. There’s no difference between this scenario and the existence of barriers between the NAFTA countries.
The fact that the USA plays hardball in trade negotiations is simply a product of two facts:
Doesn’t matter if there’s NAFTA or not; if you want Americans to treat Canadians like they’re Americans, then Canada will have to join the USA. IF you want Canada to be free, well, just accept that there’s a border there and that all business deals hit bumps.
And it works the other way, too; Canada’s not going to give the USA an even break if it suits it to do otherwise.
I’m glad Obama decided to get into the specifics there.
Sure, NAFTA has its problems, but Obama is basically hinting at protectionist bullshit with lines like “works for American workers.” That’s the same sort of doublespeak we got to justify the disastrous steel tariffs.
He says the same thing WRT to other trade. He wants ‘fair’ trade, in which the U.S. imposes 1st world labor standards on 3rd world countries. This is, in fact, a tariff.
And just what if the 3rd world country’s comparative advantage is its 3rd world labor standards? Take that away from them, and they are shut off from trade completely. It’s idiotic.
Obama also voted against the Central American Free Trade Agreement. He has a very poor record on other trade-related legislation as well.
Here at Free Trade.org, every vote on trade issues of every Senator and house member is listed. The results are plotted on a 2-axis chart, with the Y axis showing the degree in which the candidate has voted for local subsidies for exported goods, and hte X axis showing the degree in which the candidate has voted for various trade-blocking legislation.
Obama scores in the bottom left quadrant, as an ‘Interventionist’. However, Hillary Clinton was even worse.
John McCain, on the other hand, is rated a ‘Free Trader’, and has one of the best records in the Senate on supporting trade and opposing subsidies.
I’ll be the first to say that the Democrats are misguided on trade issues, but your argument here is exceedingly simplistic. “What if the 3rd world country’s comparative advantage is its 3rd world labor?” Well, what if their comparative advantage is building toys out of lead? What if their comparative advantage is child slavery? What if their comparative advantage is a mistaken short-term focus on the destruction of genetic resources when a longer-term approach would benefit both them and us? What if their comparative advantage is the failure to protect 1st world intellectual property rights?
If you’re for trade that doesn’t enforce any of the above standards, then you are against every trade agreement the US has ever signed. Countries can get all kinds of comparative advantages doing things we don’t want them doing, or that are illegal under international law. That doesn’t mean we ought not, as a country, decide not to trade with such people. Our trade policy is part of our soft power. We should wield it intelligently so that we can use our hard power less frequently.
It’s also completely false that environmental and labor standards shut off trade. They might reduce trade to some extent (and we can argue about how much), but they don’t shut it off by any means. NAFTA itself now includes some such protections. The Peru Agreement, which Obama supported as closer to the right kind of trade agreement, includes even more of the kind of environmental and labor regulations he speaks about. Is that agreement idiotic? If so, why did every single Republican except Sen. Kyl support it? If so, where is your trenchant criticism of them?
By all means, excoriate the Dems over their protectionist rhetoric of preventing jobs being shipped abroad (assuming you do the same for Romney and the other protectionist Republicans). I agree with that broadside. But on the issue of fair trade generally, please don’t offer these oversimplified and facile criticisms. You know better. In fact, you know enough about this topic to be able to elevate the discussion to where it should be in Great Debates.
Here’s what Obama said about why he opposed CAFTA:
Link .
Those are not reasonable analogies. The fact is, the reason manufacturing is going to 3rd world countries at all is because of cheap labor. Cheap labor generally means poorer working conditions. Nonetheless, these are generally far better conditions than the workers would find if the factory did not exist. Subsistence farming is no picnic.
If you put demands on the 3rd world that dramatically drive up the cost of labor, you will cut the first rung on the road to prosperity out from under them. It costs a lot of money to set up a factory in a 3rd world country - transportation is inferior, infrastructure like power, water, and sewage are often substandard. There is the added risk of political instability, nationalization, etc. Management costs are higher if you have to fly people over to run the show. The good are farther away from markets.
To overcome these liabilities, the 3rd world typically has two things to offer - natural resources in some cases, and cheap labor. Anything that drives up the cost of 3rd world labor cuts right at the heart of their only advantage.
And of course, this is exactly why pro-labor leaders in the U.S. favor these regulations. By driving up the cost of foreign labor, they ease pressures on the cost of labor at home. They’re ‘protecting jobs’. And they’re right - it’s protectionism.
There is a difference between trading with a bad actor like a dictator who is enslaving and empoverishing the people, and trading with a country of very poor people trying to get a leg up into the world economy and willing to work very hard to do so. Overly hard by 1st world conditions, in harsh environments and with poor, sometimes dangerous equipment. But it’s all they can offer. Unless you want to make such countries welfare states, trying to make them look and act like us is really just dooming them to endless poverty.
Of course not. Nothing shuts off trade. Blockades don’t even shut off trade - they just raise the black market price of everything. What they do is restrict trade - roll it back at the margins. Sucks to be you if you happen to be one of the marginal cases.
Yes. Or rather, those provisions are. Whether the overall bill is idiotic depends on the value of the rest of it. If these protections were added because it was the only way to get a bill through, and if the bill itself still moves the ball of free trade a little further forward, then maybe I would have voted for it as well. On the other hand, the reason they needed that in the first place is because you had a bunch of Senators like Obama promise their constituents that they would ‘protect’ them, and this is how they’re doing it.
Far be it from me to defend the current Republicans - many of them are just as bad as the Democrats. It is interesting to note, howeve, that of the 16 Senators in the ‘Free Trader’ column in the Cato chart, ALL of them were Republicans. It’s pretty clear that the Democratic party is re-embracing trade protectionism and populism.
I bitch about Republican protectionism all the time on this board. I’ve ripped Bush many times over his steel tariffs, and other Republicans like Huckabee and Romney.
I will grant you that there is much complexity in these agreements, and not all of it can be avoided. There’s a lot of hard negiating that goes on, and sometimes you have to put up a protectionist front as a bargaining chip because the other side is doing the same, and in the end you wind up with the best balance you can find.
Nonetheless, there is a clear pattern in Obama’s votes, and it’s pretty interventionist. Not as bad as Hillary, not nearly as good as McCain.
Pollan, M. (2004), ‘A flood of US corn rips at the heart of Mexico’s farms’, The Ecologist, vol. 34, iss. 5, pp. 6-8.
According to a Carnegie Endowment report from 2003, dumping of US corn in Mexico due to free trade has caused 1.3 million farmers to leave their lands, joining the ranks of urban unemployed and forcing migration of others to the US to work as crop-pickers.
it sounds like you people believe NAFTA was designed for the benefit of the US. It was designed for the benefit of the international corporations. They can cut labor costs around the world and make huge profits. The selling of NAFTA was that it would increase nwages and environmental considerations. These were gutted. It only permits cheap labor and no regulation. It needs to be fixed.
I do not object to this more reasonable version of your argument. But if you accept that some standards are acceptable, we’re talking about where to draw the line, not whether to include them at all. Should we require OSHA-like standards in Peru? Hell no. Should we require that these countries allow freedom of association for their workers? Yes, I think we should. That is part of ensuring a free market in our trading partner’s nation, and is a minimum standard, like no slavery.
But it also vastly improves the lives of those who continue to trade. It lifts their wages, improves their conditions, etc. The question here is which is better: a hundred relatively better paid and healthy workers, or 120 poorly paid and poorly treated workers? I don’t think that question is as black-and-white as you suggest. One thing IMF policies have ably demonstrated is that cutting back on labor and enviromental standards and social services doesn’t correlate very well to development.
Did you read why he rejected CAFTA? I see him doing the exact opposite of what you claim in this post.
I don’t see it. As you point out, these trade bills are enormously complex and to characterize any of them as pro-free trade or anti-free trade is an exercise in Manichean categorization. Let’s consider your CATO chart. The Y-axis is about opposition to subsidies. Obama’s score is based on two votes: the 2007 Farm Bill and an emergency farm spending bill. I think two votes, no matter how they were cast, are too few data points to form an opinion. But the Farm Bill is also enormously complicated. A vote for or against it signals very little about any one issue.
If you actually read Obama’s opinions on the subject, I think you’ll find him to be much more moderate on trade than you suggest. IMHO, he might be a little to the right of the majority of the country on the issue.
I will grant you this - Obama’s position on trade is ‘nuanced’. ‘Fair Trade’ advocates are always especially difficult to parse, because ‘Fair Trade’ is a useful political tool which can be used in two ways: Free Traders can sometimes use it to placate their labor constituency. Protectionists and isolationists can also use it to mask their real agenda of shutting down foreign trade while claiming to be for foreign trade so long as some conditions are met (which never are).
Obama has said that he thinks freer trade is generally better than protectionism. However, he has a 100% voting record on bills that favor labor, and labor is the most protectionist constituency around. So far, the votes he has actually cast (not many, I’ll grant you) have not shown him to be a free trader.
The big problem I have with Obama is exactly what we’re talking about - it’s hard to know what he’d actually do. He’s only been in the Senate for one term, and for half of it he was running for President and you expect his votes to be strategically modified for that. His rhetoric doesn’t always match his stated goals. His campaign platform is extremely liberal, yet he campaigns as a moderate. His advisers run the spectrum from almost-libertarian to far-left, so you can’t even tell which way that wind is blowing. It’s a neat trick, and so far the voters are buying it.
But if you look purely at his voting records in the Senate and in his state, the guy votes straight liberal positions almost all the time. So given the only evidence we have, when presented with ambiguous information regarding his intentions, I have to assume that the most liberal interpretation is probably the more likely one. And these days, the Democrats are very protectionist.
According to this study, the overall net effects of NAFTA have been negative on all three countries.
Wow, I’m shocked - a pro-labor, anti-trade organization does a ‘study’ and finds that free trade hurts everyone!
In other news, a poll of RJR Reynolds executives finds that cigarettes aren’t so bad after all.
Everything is a “study.” Everything you consider is a “study.” Information always comes from a particular source.
Each one of us has to decide whom we’re going to believe.