Newspaper article St Louis Post-Dispatch (MO)

Will U.S. Blink in Free Trade Test?

Newspaper article St Louis Post-Dispatch (MO)

Will U.S. Blink in Free Trade Test?

Article excerpt

We've had the debate and now it's time to vote on NAFTA. It's still difficult to separate fact from fiction. NAFTA's proponents claim the treaty will create tens or even hundreds of thousands of high-paying jobs in the United States. NAFTA's opponents accept the Ross Perot "great-sucking-sound" disaster with millions and millions of jobs galloping to Mexico.

It's the same stretching of logic that you find in so many contemporary public debates. Rationality succumbs to grandiose claims. In today's politics, you can't discuss an issue in the rational middle; you shout it from the shrill extremes. And so NAFTA discourse has degenerated into a war of words in which euphoria battles catastrophe while reality sits on the bench.

Free trade as currently exemplified by NAFTA is an article of universal faith among economists across the spectrum, from supply-siders to Keynesians. It is just about the only precept that unites conservatives like James M. Buchanan and Milton Friedman with liberals like Paul Samuelson and James Tobin. NAFTA and free trade unify all of the 17 living American Nobel Prize winners in economics. That seldom happens.

There really has been nothing new in the development of the doctrine of free trade since the 18th century. John Stuart Mill defined free trade as "a more efficient employment of the productive forces of the world," and that definition reigns today despite two centuries of heated trade debates, especially in America and Europe.

In the 1950s and '60s, everyone in America, including the AFL-CIO, was for free trade. Back then, we mostly argued about what would happen here at home when American companies began building plants abroad. In the 1970s and '80s, Europe argued about trade within the European Community. It was claimed then, as now with Mexico, that low-wage economies in Spain, Portugal and Greece would destroy the high-wage levels of the rest of Europe. But multinationals haven't destroyed American commerce; without them, our struggling economy would be a disaster. And low wages in Spain, Portugal and Greece haven't destroyed the EC.

What would NAFTA do for America and what for Mexico?

For the United States, the more conservative economic studies suggest that NAFTA would add about a tenth of a percentage point to our Gross Domestic Product over a decade. …

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