The Perils of Tampering with NAFTA

Posted by: Diane Brady on March 28, 2008

People have strong views about the North American Free Trade Agreement. Either it’s the best thing for U.S. business, removing tariffs and other obstacles to trade, or it’s the worst, allowing jobs to migrate across the border. Both Democratic candidates have spoken fiercely about the need to renegotiate the deal.

But, as a piece in The Globe and Mail points out today, negotiation is a two-way (or, in this case, three-way) process. Some U.S. leaders may want to incorporate tougher labor and environmental standards. But Canadian officials, for their part, may want to negotiate other things—like privileged U.S. access to its northern neighbor’s rich energy supplies.

Opposition to NAFTA often focuses on the loss of higher-wage manufacturing jobs over the last 14 years, since the agreement came into effect. The assumption seems to be that those jobs would still be here, if not for the formation of the world’s largest trading bloc (in terms of combined GDP). Those jobs would have likely disappeared in any case.

Can the pact be improved? Sure, as a piece by my colleague Chris Farrell points out. The U.S. could lose as much as it gains, though, by trying to gut key parts of the agreement.

Tough talk on NAFTA may seem to play well in Pennsylvania, where the steel industry has contracted sharply and unionized jobs are becoming a thing of the past. But the state is also home to a number of high-tech industries that enjoy the benefits of globalization. Support for free trade may be stronger there than either Democratic candidate assumes.

Reader Comments

tony

March 29, 2008 11:42 AM

nafta has also allowed those high tech jobs to be outsourced too. India and China showing massive growth while we deteriate but those upstairs are not impacted because they are making more now then they ever did. high tech means less people. It's not going to get better.

Tony

March 31, 2008 10:58 AM

What does Nafta has to do with China and India Tony? Taught this was a North America Free Trade Agreement. Since when China and India is in North America or am I missing something?
This is between US, Canada and Mexico. You are barking up the wrong tree.

Tony

April 1, 2008 10:53 AM

Regardless of what we do , we still have a trade deficit to deal with , and the fact that if balanced trade woruld have been going on over the past 14 years of NAFTA and the WTO , Bench marks set for Countries to Float their currency to the dollar and the euro , or we reinstate tariff Trade to balance the trade deficits , should have been the trade Policy . As far as higher priced products being an issue , when you factor in the cost of the deficit we have to pay for with higher taxes coming , and higher Food costs , living costs , it really has been a failure , because it has done nothing to promote Alternative Resource Expannsion , and development , only led to a Consolidation of the wealth of the Resources and products sold to Consumers

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