U.S. ELECTIONS | Guide to the 2008 Election
03 March 2008
NAFTA Challenged by Presidential Candidates
Trade pact blamed for high unemployment, economic distress
Washington -- The world's largest trading partnership is drawing considerable criticism from the two remaining Democratic presidential candidates, and President Bush, who has shied away from public involvement in the 2008 presidential campaign, recently weighed in on the debate.
His comments during a White House news conference reflected the difference between campaign rhetoric and public policy and sought to allay possible confusion overseas about U.S. intentions.
U.S. Senators Hillary Clinton and Barack Obama, the leading Democratic candidates, have not endorsed withdrawing the United States from the North American Free Trade Agreement (NAFTA) among Canada the United States and Mexico, but are urging tougher enforcement of its related labor and environmental agreements.
"I don't think it's realistic for us to repeal NAFTA," Obama said during a recent town hall meeting in Ohio. But, he added, "I don't think NAFTA has been good for America – and I never have."
During her debate with Obama on February 26, Clinton said she would "renegotiate" the agreement on terms that are favorable to all of America.
"But let's be fair here, there are lots of parts of New York that have benefited, just like there are lots of parts of Texas that have benefited."
Nationwide, response to NAFTA is not unified, but instead tends to reflect the effect of the trade pact on a given state's economy. NAFTA critics have argued that it has driven high-paying jobs into Mexico and Canada and done little to help the American worker, created economic stagnation among the American middle class, the largest part of the U.S. work force, and caused an increase in income inequality.
Clinton and Obama have made their strongest arguments regarding NAFTA while campaigning in Ohio, which is one of the crucial states in the ongoing contest for the Democratic presidential nomination. Many in Ohio blame NAFTA for robbing the state of valuable jobs.
A TALE OF TWO STATES
When NAFTA’s implementing legislation was signed by President Bill Clinton in 1993, Ohio had approximately 1 million manufacturing jobs; three years later it rose past the 1 million mark and stayed above a million for the remainder of the 1990s, according to U.S. economic statistics.
Since the beginning of the 21st century, the number of manufacturing jobs in Ohio has fallen to fewer than 800,000.
Bush disagrees that NAFTA has been bad for the U.S. economy, and he said so February 28.
In Texas, NAFTA has had a different economic impact. Border towns, especially along the U.S. southern border, have shown remarkable economic growth, and leaders there have attributed it, in part, to the impact of NAFTA, Bush said.
"The idea of just unilaterally withdrawing from a trade treaty because of ... trying to score political points is not good policy. It's not good policy on the merits and it's not good policy as a message to send to ... people who have, in good faith, signed a treaty and worked with us on a treaty," Bush said.
Bush consistently has been a believer in the economic purposes for free-trade agreements as a necessary source for the formation of high-paying, quality jobs in the United States and also abroad.
"One statistic I think people need to know is ... there's roughly like $380 billion worth of goods that we ship to our NAFTA partners on an annual basis. Now, $380 billion worth of goods means there's a lot of farmers and businesses, large and small, who are benefiting from having a market in our neighborhood."
Bush said the trade agreement has meant prosperity on both sides of the borders. In an agreement like this one, he says, everyone expects to be treated the same way, and everyone benefits economically.
U.S. Senator John McCain and former Arkansas Governor Mike Huckabee, the two remaining Republican candidates for president, are free-trade advocates and have not been as sharply critical of NAFTA as the Democratic candidates.
DOMESTIC CRITICISM NOT BACKED BY ECONOMIC REALITY
Trade specialists see NAFTA as a target of domestic economic criticism, criticism not justified in economic terms.
"If you analyze the sum total of all trade agreements that the United States has signed over the last decade, they have definitely reinforced the globalization of the American economy, which has put a lot of sectors, particularly manufacturing, under intense competition," says Edward Alden, a trade and immigration expert at the Council on Foreign Relations.
"But only a small fraction of that competition has actually come from the countries that are part of NAFTA, namely Mexico and Canada. Most of the competition has come from the rest of the world."
The debate, Alden says, has become divorced from the reality of the trade agreement. Neither Democratic political candidate, he notes, has expressed a desire to revoke NAFTA, but instead both have called for renegotiation of labor and environmental side agreements with Mexico.
Alden says considerable pressure on the U.S. manufacturing base is coming from trade with China, Japan and India. But Alden also says that it is unlikely any of the candidates would seek to renegotiate trade agreements once elected to office.
