Should NAFTA Be Revisited? If You Had to Do It All over Again, Would You as President of the United States Support NAFTA-The North American Free Trade Agreement-As Implemented?

The International Economy, Summer 2008 | Go to article overview

Should NAFTA Be Revisited? If You Had to Do It All over Again, Would You as President of the United States Support NAFTA-The North American Free Trade Agreement-As Implemented?


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The views of twenty experts.

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Definitely yes.

CHUCK GRASSLEY

United States Senate (R-/A), and Ranking Member, Senate Committee on Finance (with jurisdiction over international trade)

In 1993, I voted to implement the North American Free Trade Agreement. I was confident that this agreement would provide significant benefits for the United States. Some fifteen years later, I know that my vote was the right one.

Prior to NAFTA, the United States applied an average overall tariff of about 2 percent on imports from Mexico, while Mexico applied an average tariff of about 12 percent on U.S. exports. With NAFTA, we leveled the playing field for U.S. exporters by dropping the tariff to zero on both sides of the border. At the time NAFTA was implemented, Canada already was phasing out its tariffs on U.S. imports under our 1988 bilateral trade agreement.

Since implementation, U.S. merchandise exports to Canada and Mexico have more than doubled. These exports support good-paying jobs here in the United States.

Particularly important to my home state of Iowa, the agreement has brought significant benefits to American farmers. While worldwide exports of U.S. agricultural products grew by 65 percent from 1992 to 2007, agricultural exports to our NAFTA partners increased by 156 percent over this time period.

Contrary to claims that NAFTA has harmed Mexican corn farmers, Mexican corn production actually has increased slightly since implementation. Mexican exports of high-value fruits and vegetables have risen significantly under NAFTA. Mexican consumption of meat has grown substantially, which is due in part to increased access to affordable feed from the United States.

The benefits are more than economic. Mexico has made significant strides toward democracy since 1993, which I am convinced can be attributed in part to the agreement. After all, free markets help to strengthen and reinforce the rule of law.

The bottom line: All three countries--the United States, Mexico, and Canada--are better off after NAFTA than before it. If the past is a guide, the next fifteen years will bring even more prosperity and opportunity than the last.

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No, U.S. corporations have no "American" interest.

VICTOR KAMBER

President, Coalition Services Practice, Carmen Group, Inc.

I'll concede that Bill Clinton had a good idea when he launched NAFTA. It was going to be good for business, good for workers, good for our economy. We foolishly believed we were all in this together, equal partners in a bold new venture to create jobs and prosperity across the hemisphere.

What we failed to realize is that despite the American flag lapel pins their CEOs wore, U.S. corporations have no "American" interest in their global wheeling and dealing. Only the bottom line matters. They saw NAFTA as a superhighway to drive down wages, and they put the pedal to the metal.

Shuttered factories and loss of manufacturing jobs have made voters angry and frustrated, which is why NAFTA has become a big issue in the 2008 presidential debates.

Both Senators Clinton and Obama have said they would renegotiate NAFTA. They don't want to stop trading with Canada and Mexico, but they don't like the way the game is played. NAFTA rules are patently unfair to American workers. Powerful corporations get all the protections while defenseless workers get only promises.

For American labor unions, the very notion of our government enforcing international labor provisions is suspect anyway, since they've done such a poor job of it here at home.

In years past, when unions were in tough bargaining for a new contract, their employers often would threaten to move their factories to the non-union Deep South. Now with NAFTA, they go further south, creating that giant sucking sound Ross Perot talked about. …

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