NAFTA deals enter the presidential debate
Democratic presidential hopeful John Edwards spent years trying to make NAFTA and the impact of global investment deals (mis-labeled "free trade" deals) a major election-year issue. But it's taken a recent spat this week between front-runners Sens. Hillary Clinton and Barack Obama to inject this important issue into the political debate.
As columnist David Sirota noted earlier this week, Obama has been embracing many of Edwards' populist themes since Edwards left the race, including attacking Clinton's record on NAFTA and investment deals. Here's this from a recent Obama speech:
In 2005, the Economic Policy Institute did a breakdown of which states had fared the worst since NAFTA was signed in 1993. Out of the 1 million + jobs that were "displaced" by NAFTA, here are the states that lost the most in terms of their total employment:
Sam Stein of the Huffington Post says that Hillary Clinton privately had misgivings about NAFTA but couldn't voice them for fear of derailing a cornerstone of her husband's economic agenda. For evidence, he looks to quotes like this one from Clinton biographer Carl Bernstein on CNN:
But at the end of the day, all we have on the record are a candidate's public statements and actions. And in this case, if Hillary Clinton had misgivings about NAFTA, she didn't go out of her way to demonstrate that to the world; in fact, she did the opposite.
As columnist David Sirota noted earlier this week, Obama has been embracing many of Edwards' populist themes since Edwards left the race, including attacking Clinton's record on NAFTA and investment deals. Here's this from a recent Obama speech:
It's a Washington where decades of trade deals like NAFTA and China have been signed with plenty of protections for corporations and their profits, but none for our environment or our workers who've seen factories shut their doors and millions of jobs disappear; workers whose right to organize and unionize has been under assault for the last eight years.As we've reported before, NAFTA and its legislative spawn like CAFTA are hot topics in the South, where these deals have wreaked much of their havoc.
In 2005, the Economic Policy Institute did a breakdown of which states had fared the worst since NAFTA was signed in 1993. Out of the 1 million + jobs that were "displaced" by NAFTA, here are the states that lost the most in terms of their total employment:
Michigan (-63,148, -1.44%)So Southern voters are listening carefully when Obama charges Clinton with saying that NAFTA was a "boon" to our nation's economy. But did she really think that?
Indiana (-35,157, -1.19%)
Mississippi (-11,630, -1.03%)
Tennessee (-25,588, -0.94%)
Ohio (-49,886, -0.92%)
Rhode Island (-4,482, -0.91%)
Wisconsin (-25,403, -0.90%)
Arkansas (-10,321, -0.89%)
North Carolina (-34,150, -0.89%)
New Hampshire (-5,502, -0.87%)
Sam Stein of the Huffington Post says that Hillary Clinton privately had misgivings about NAFTA but couldn't voice them for fear of derailing a cornerstone of her husband's economic agenda. For evidence, he looks to quotes like this one from Clinton biographer Carl Bernstein on CNN:
"'Bill,'" [Bernstein] recalled Hillary Clinton as saying, "'you are doing Republican economics when you are doing NAFTA.' She was against NAFTA. And if she would somehow come out and tell the real story of what she fought for in the White House and failed in a big argument with her husband she would end up moving much closer to those [John] Edwards followers."But Sirota has plenty of counter-evidence, in the form of Hillary Clinton's enthusiastic public statements about NAFTA's promise:
Hillary Clinton has made statements unequivocally trumpeting NAFTA as the greatest thing since sliced bread. The Buffalo News reports that back in 1998, Clinton attended the World Economic Forum in Davos, Switzerland, and thanked praised corporations for mounting "a very effective business effort in the U.S. on behalf of NAFTA." Yes, you read that right: She traveled to Davos to thank corporate interests for their campaign ramming NAFTA through Congress.Sirota has a good point. We can always second-guess how a politician privately feels about an issue. Do they really agree? What do they have to say for political reasons?
On November 1, 1996, United Press International reported that on a trip to Brownsville, Texas, Clinton "touted the president's support for the North American Free Trade Agreement, saying it would reap widespread benefits in the region."
The Associated Press followed up the next day noting that Hillary Clinton touted the fact that "the president would continue to support economic growth in South Texas through initiatives such as the North American Free Trade Agreement."
In her memoir, Clinton wrote, "Senator Dole was genuinely interested in health care reform but wanted to run for President in 1996. He couldn't hand incumbent Bill Clinton any more legislative victories, particularly after Bill's successes on the budget, the Brady bill and NAFTA."
But at the end of the day, all we have on the record are a candidate's public statements and actions. And in this case, if Hillary Clinton had misgivings about NAFTA, she didn't go out of her way to demonstrate that to the world; in fact, she did the opposite.
Labels: barack obama, Election 2008, free trade, hillary clinton, NAFTA
2 Comments:
It never ceases to amaze me how people who consider themselves to be enlightened and progressive merely take it as an article of faith that trade liberalization and investment protection agreements have resulted in a net loss for the United States economy.
The statistics just do not support it. Sorry, but they don't - especially for the NAFTA, which has greatly benefited all three countries. The vast majority of economists are in consensus that these agreements have provided, and will continue to provide, a net benefit to all parties to them. That's why so many developing economy governments are entering into them with each other.
Yes, the WTO rules governing agriculture and agricultural subsidies were not nearly as balanced as they could have been, to the detriment of the poor in rural countries worldwide, but as a southerner you could hardly complain about that. Two of the primary US subsidy regimes protected under this sub-optimal agreement were cotton and sugar!
If you progressives were nearly as progressive as you claimed to be, you would be arguing for the elimination of these regimes, which would cause economic harm to Southern cotton and sugar producers but would do a great deal more to help so many more in the developing world to finally obtain an independent, sustainable existence.
But there is a more difficult truth here that you seem incapable of accepting. The fact is that trade and investment agreements aren't nearly as determinative of economic outcomes as much, much broader changes in the world economy. If you placed all of the tariffs back to the position in which they would have been in 2004, all of the events of which you complain would still be happening.
Globalization is not a function of the NAFTA or the WTO. They are only a small part of the picture (and a part that largely ameliorates it). Glbalization is a function of technological and systemic developments that go far behind lowered tariff barriers.
This is not to say that you wouldn't get some bang for your buck if you instantly raised tariffs and tariff barriers and prohibited foreign investment on the same terms as domestic investment. You would most certainly plunge the world into a severe economic depression (does "Smoot Hawley" ring a bell?).
Given how your current president's reckless fiscal policies and unjustified and unsupportable intervention in Iraq have already reeked real havoc on your economy, about the only thing you could do to make matters worse is elect somebody like John Edwards, with his inane protectionist policies.
I think the jury's out on Obama, thankfully. I doubt he's really that dumb. He's just courting the parochial union vote, as all successful democrats do during the primary season.
Mr. Edwards is right to a certain extent. Mr. Edwards failed though to point the fickle finger of fate at Pres. Clinton for emasculating the enforcement provisions of NAFTA. The NAFTA treaty drafted by the Bush Administration contained formidable enforcement provisions that allowed affected parties of one NAFTA country to file and pursue actions for violations committed in another of the NAFTA countries. The rewrite fostered by Pres. Clinton removed all substantive enforcement provisions NAFTA now prescribes that the accused NAFTA country is charged with investigating itself and if culpable pursuing legal redress. In otherwords, the Fox (Presidente) is in charge of the hen house.
The lack of meaningful enforcement provisions has led to NAFTA companies violating the civil and labor rights of American employees working in Mexico. A Mexican Court recently ruled that plaintiff American employees had been defrauded out of compensation equal to 69% of their base pay. The enforcement of the ruling was deterred when a higher court ruled that although the interpretations of the Mexican Constitution, Labor and Tax Laws were correct, the enforcement of the ruling would be precluded because incriminating questions were asked of U.S. company executives and officers during cross examination.
The Governments of the other NAFTA countries refused to intercede because the issue was a domestic affair of Mexico. Albeit that the affected parties were American. There are more than 4,000 U.S. companies with operations in Mexico. These companies have more than 100,000 Americans working in Mexico. That other U.S. companies are potentially conducting themselves in a like manner is underscored by two recent Mexican Supreme Court (SCJN) rulings. The actions pertained to like issues in the previously mentioned ruling pertaining to fraud of 69%. The SCJN rulings were favorable to American employees working in Mexico for Halliburton.
The cheating of compensation at the rate of 69% of base pay amounts to hundreds of millions of dollars each year. These are manufacturing costs not incurred and evaded costs that are distributed as bonuses and raises to scofflaw executives and officers of offending U.S. companies. The resulting undervalued Mexican goods are imported to compete with articles made by fully compliant American manufacturers.
The defrauded monies also failed to pay Mexican Social Security Taxes. There is a bilateral tax treaty between the U.S. and Mexico. The failure to pay owing compensation means social security taxes were avoided. The tens of millions in social security taxes are sorely needed by Mexico. But, Mexico needs the employment provided by the NAFTA companies so they keep quiet and let their populace suffer treatable health problems. The result in part is the poor Mexicans sneak into the U.S. not only seeking work - they're seeking health care.
There must be U.S. companies with operations in Mexico that are law abiding and conscientous. The problem is that those that are not are ruining it for those that are. NAFTA could work, but the participants must all be law abiding and conscientous. We've seen too many scofflaw U.S. companies to believe in miracles.
Post a Comment
Return to Facing South's main page