I had originally planned a discussion of the treatment of oil and water under the WTO, but after watching news reports today I cannot resist one more post on NAFTA. The story of the day is that one of Sen. Barack Obama’s top advisors, Professor Austan D. Goolsbee (below right) of the University of Chicago (photo credit), met with Canadian diplomats to reassure them Obama’s stand on NAFTA was “more reflective of political maneuvering than policy.” Goolsbee is reputed to have said Obama’s language “should be viewed as more about political positioning than a clear articulation of policy plans.” Hmmm. So, let me get this straight . . . we are not walking away from NAFTA after all? Did anyone actually believe we would? I have never considered myself a NAFTA cheerleader. As those who read my previous posts know, I have both a philosophical and economic preference for multilateral agreements. (In fact, we are currently in the midst of a multilateral round of negotiations right now—the Doha Development Round—although you wouldn’t know it given the singular lack of media coverage of the Round). But I find it hard to remain silent in the face of the careless and hyperbolic discussion on trade I see occurring in public discourse. Can we all just agree the debate on NAFTA was fought and won back in 1994? We entered the agreement fully aware it would have some impact on our economy, but the impact would be relatively minor. And that is exactly what happened. When I say “minor,” I do not mean to dismiss the thousands of families who have lost their livelihoods in the wake of NAFTA. But NAFTA does not exist in a vacuum, we are signatories to a host of multilateral and regional agreements. Will we bow out of those as well? Job losses occur for many reasons—including technological innovation. Producers of horse carriages experienced large-scale displacement when the automobile became widely-available, but no one would suggest a return to the horse-and-carriage regime. The job losses from NAFTA can and should be addressed. We should be exploring the candidates’ proposals on job creation, their support of innovation, and tax incentives—all of these contribute to the creation of new possibilities for displaced workers.
Moreover, NAFTA is not just about job losses, we have also gained a great deal. Mexico and Canada are now the United States’ top trading partners, and consumers, workers, entrepreneurs, the Tax Man, we all benefit from that relationship. Are we prepared to give up those gains? What the NAFTA debate has shown in stark relief is that the benefits and harms of the agreement are not evenly distributed. Border states like Texas benefit from NAFTA—in terms of exports, jobs and investment to list just a few examples. Other states, like Ohio, suffer the harm of job losses. We need a real plan to balance the benefits/detriments equation. It is a discussion that cannot be achieved through snippets, accusations and sound bites. We have done an abysmal job of creating a place for the candidates to relate their true position—in all of its nuance, caveats and uncertainties. Perhaps a Mexican government official put it best when he said “we are convinced that what North America needs is more integration and not less integration. North America needs to look to the future and not return to the past.”