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.
How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.