Tuesday, June 24, 2008

Is Obama "Backtracking" on NAFTA?

"I will make sure that we renegotiate [NAFTA]"
--Barack Obama (Feb. 26, 2008)

The Talking Heads are buzzing over a Fortune magazine interview with Barack Obama. What's all the excitement about? During the democratic primaries, Obama famously called North American Free Trade Agreement "devastating" and "a big mistake," and he promised to renegotiate the agreement. But in the Fortune interview, Obama allegedly said "Sometimes during campaigns the rhetoric gets overheated and amplified . . . Politicians are always guilty of that, and I don't exempt myself."

So is the presumptive Democratic nominee backtracking on his anti-NAFTA stance? You would think so from the hue and cry coming from the left. The Nation immediately published a story proclaiming "Obama Goes Soft on Free Trade." Columnist John Nichols wrote "All that is required is that Barack Obama campaign as a critic of the North American Free Trade Agreement and other deals that have battered workers, farmers, communities and the environment ... Unfortunately, [Obama], who sent so many smart signals on trade issues when he was competing with Hillary Clinton . . . appears to now be backtracking toward the insider territory occupied by McCain."

I'm not sure how a comment that politicians sometimes indulge in hyperbole (big surprise!) somehow translates into a wholesale rethinking of trade policy, but if it is true that Obama is backtracking I for one would applaud the move. In an op-ed published a few months ago, I noted Obama's (and Clinton's) I-hate-NAFTA-more rhetoric is dangerous. It is dangerous for precisely this reason. Once a candidate flirts with the radical edge of the anti-free trade camp, it is really hard to come back to the middle path without being accused of "backtracking."

I had always found Obama's claim that he would renegotiate NAFTA suspect. Having been involved in a number of trade deals while I was at the Office of the U.S. Trade Representative, I know first-hand that negotiating an agreement as complex as NAFTA is no easy task. There are constituencies from all possible sides: those who want us to get greater concessions from our partners so they can export more goods; those who want fewer restrictions so they can import more goods; those who want an agreement vastly different from what's on the table; those who want no agreement at all; and those who just want to be ornery. And what about our trading partners--do you think maybe they might have a thing or two they would like to renegotiate if the opportunity arose? Satisfying those competing interests is next to impossible, and once you finally get a deal that everyone can sign on to (even if no one is optimally happy), you don't go opening up the same can of worms again.

Besides, Obama has never styled himself a true anti-free trade crusader. He has on a number of occasions noted there are both costs and benefits to free trade. Even in the language I quoted above, Obama did not call for a wholesale dismantling of NAFTA but rather advocated that "we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced."

Both Obama and economic advisor Austan Goolsbee were ridiculed in the press when Goolsbee went to the Canadians shortly after the Cleveland debate to reassure them that his boss' rhetoric was "more reflective of political maneuvering than policy." Perhaps I am a cynic, but I was surprised that so many failed to make a distinction between political speeches and trade policy. Trade policy is a dirty job of political maneuvering, horse trading, and rejoicing in incremental achievements. But like planting seeds in a vegetable garden, the end result of all that dirty work is lots of edible goodies, which are mostly good for you (although they are sometimes bitter).

If Candidate Obama is doing a bit of shuffling in order to return to middle ground, all I can say is "Shuffle on!"

(Cross-posted at Trade Voices.Com)

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