logo logo

Revisiting (and reworking) NAFTA | January 23, 2008

Trade & Politics: Revisiting (and Reworking) NAFTA

By David R. Butcher

As presidential candidates jockey for position in the primaries, free trade has taken a more prominent role than anyone expected. And with the nation grappling with the threat of recession, the North American Free Trade Agreement (NAFTA) has been coming under fire. A recently introduced bill would require improving NAFTA — or withdrawing from it.

Reps. Nancy Boyda (D-Kansas), Marcy Kaptur (D-Ohio) and five others last month introduced legislation ordering the government to renegotiate the controversial United States-Mexico-Canada free trade treaty. The NAFTA Accountability Act, H.R. 4329, would require evaluation of NAFTA impacts and renegotiation or withdrawal from NAFTA if certain conditions are unmet.

According to Congresswoman Boyda’s Web site last month:

The bill finds that, since NAFTA was enacted, the American trade deficit with Mexico and Canada has climbed to $919 billion. Outsourcing has devastated the U.S. manufacturing base and cost America over a million living-wage jobs, and poor border security has contributed to the illegal importation of methamphetamine, cocaine and marijuana from Mexico.

According to news reports earlier this month, dozens of Mexican farm activists in Ciudad Juarez blocked one lane of the border bridge leading into El Paso, Texas, to protest the unrestricted imports of U.S. corn, beans and sugar as part of a 36-hour demonstration. A new contingent of farmers this week joined a march heading toward the capital in rejection of NAFTA.

A week after the first protest, Mexican President Felipe Calderon defended NAFTA, saying the trade agreement has generally “been beneficial for Mexicans because it has given consumers access to a greater range of high-quality products at better prices.”

Trade using surface transportation between the U.S. and its NAFTA partners Canada and Mexico hit an all-time high in October, according to recently released data from the Department of Transportation’s Bureau of Transportation Statistics.

Imports into the U.S. from these two countries increased nearly 11 percent in October over the previous year, reaching $74.2 billion, while exports also rose significantly.

Trade with Canada rose 14.1 percent to $47.68 billion in October, while trade with Mexico rose 6 percent to $26.57 billion, according to the government data.

The top-tier Republican candidates for most of last year all support a conventional pro-trade agenda. The top-tier Democrats on the other hand, oppose a conventional trade agenda. (Rather than flat-out opposing lower barriers to trade or endorsing explicitly protectionist measures, Democratic candidates often couch their views in terms of environmental concerns and workers’ rights.)

Yet even supporters admit NAFTA is flawed, but nobody had the guts to fix the problem.

The NAFTA Accountability Act, an omnibus bill that lawmakers approved to fund 12 government departments and various agencies, includes a provision asking the Bureau of Labor Statistics to study the impact of NAFTA. If the negotiations do not produce five specific, concrete improvements, the bill says the U.S. must withdraw from NAFTA.

The following are the five conditions:

  1. Gains in U.S. jobs and living standards (by the Secretary of Labor);
  2. Increased U.S. domestic manufacturing (by the Secretary of Commerce);
  3. Improved health and environmental standards, with respect to food imports and to U.S.-Mexico border areas (by the Secretary of Agriculture, the Administrator of the Food and Drug Administration, and the Administrator of the Environmental Protection Agency);
  4. Reduced flow of illegal drugs from Mexico and Canada (by the Attorney General); and
  5. Mexican democracy and human freedoms (by the President).

“NAFTA is dragging down our economy, weakening our borders and devastating our manufacturers," Boyda, the lead sponsor, told a radio show announcing the H.R. 4329 bill. "After 14 years, it’s time to either fix NAFTA or get the heck out of it."

Should the next U.S. president walk the walk of protectionism? Let us know what you think in the comments.