Thursday, February 28, 2008

Hammering NAFTA

In Mexico City yesterday, signatories of the North American Free Trade Agreement (NAFTA) were highly critical of statements made by Democrats Hillary Clinton and Barack Obama during their Tuesday debate indicating they would "opt-out" of the trade pact.

"I will say we will opt out of NAFTA unless we renegotiate," said Clinton.

Obama concurred: "We should use the hammer of a potential opt-out."

But as Michael Luo points out today in The New York Times, despite the harsh rhetoric, the candidates have staked out nuanced positions on NAFTA. Luo quotes David Gergen, an adivser to President Bill Clinton as saying that Senator Clinton was "extremely enthusiastic" about the trade agreement while it was being crafted. As recently as 2004, she claimed that NAFTA had been "good for New York and good for America."

Obama, for his part, while consistently hammering NAFTA, has not differed from Senator Clinton at all when voting in the Senate on trade issues. As Eduardo Porter notes in his article, "Nafta Is a Sweet Deal, So Why Are They So Sour?," the real benefits from a dismantling of the agreement would accrue to powerful industrial and agricultural special interests "who survive behind protective barriers." Specifically, American Big Sugar and Mexican corn farmers.

So why are Clinton and Obama itching to prove just how much more opposed to NAFTA they are then the other guy?

It's Ohio, stupid. The hotly contested state has lost hundreds of thousands of manufacturing jobs in the last five years.
In Ohio, which has lost nearly 225,000 manufacturing jobs since 2001, NAFTA is an easy target. For many working-class Ohioans – and the voters Sens. Barack Obama and Hillary Rodham Clinton hope to win in Tuesday's critical primary – it stands as a symbol for much that troubles their state. Against that backdrop, say experts, it's not surprising it's become a political piƱata.


mike's spot said...

Your spot on- NAFTA has taken many, many jobs out of the US- and has damn near single handedly crippled the Unions. The strike is becoming a paper tiger. Companies just say they will move if workers try to strike for a fair wage.

I'm not sure who NAFTA did help, but it wasn't middle class America.

Matthew Hennessey said...

Mike's spot -- You may have mistaken my meaning. To get a better sense of how NAFTA is being used as a political pinata, please click read my recent article on Policy Innovations.

acarr08 said...

Who is to say that Obama and Clinton haven't reassessed their stances on NAFTA since 2004? I don't believe these candidates would just outright lie about their true feelings on NAFTA. Could it be a possibility that they have simply changed their views after conducting more in depth research as a result of their Presidential hopes?

Amanda said...

First of all, it makes me sad when politicians care more about winning votes than doing what's best. I haven't researched enough to conclude that this is the case regarding the Democratic candidates and NAFTA, but political "flip-flopping" and special interests are significant contributors to the current increase in political apathy among the younger generations.

I have always been in support of NAFTA, it has been a part of America's economic success in the past and is an important part of future "fairer" globalization. After reading the NY Times article I agree that removing barriers to agricultural trade in North America will benefit American consumers and poor Mexican farmers. Who cares about the big sugar barons? They need the least amount of help, in my opinion. Hopefully, our future government will continue to honor the Free Trade Agreement that has helped many economies and cross-cultural interactions in the past.

erich said...

mea culpa. $460B/yr exported is correct, but am still troubled by translation into per gallon impact, Seems to me crude adds just $2.00/gal to the cost and even doubling that for unaccounted (read hidden tax shifted from producers to consumer by taxing at the general fund, rather than as an excise tax)costs, we would just be adding $4.00/gal, not the $8.00 plus stipulated.

what am i missing?