Sunday, April 20, 2008

Of Course They'll Defend NAFTA

White House defends NAFTA in runup to meeting between Bush, Harper, Calderon

WASHINGTON - The U.S. administration is looking for ways to counteract a barrage of negative rhetoric about NAFTA from Democrats and persuade Americans the trade deal works, the White House said Friday.
Dan Fisk, senior director for Western Hemisphere affairs, said the three North American leaders will address the issue next week when they meet in New Orleans for their fourth annual trilateral summit.
Both Hillary Clinton and Barack Obama, seeking support from voters who view NAFTA as a job-killer, have threatened to pull out of the free trade pact if it isn't renegotiated to include protections for workers and the environment.
"There's nothing broken - why fix a success?" said Fisk, who noted three-way trade among the United States, Canada and Mexico has more than tripled to $1 trillion a year since NAFTA came into effect in 1994.
"We want to find ways to, frankly, convince the American people...that this is an arrangement that's worked for us and it's also worked for our neighbours. It's been a win-win situtation."
Some of the criticisms of NAFTA have made bigger headlines in Canada and Mexico than in the United States, he noted.
Canada's Conservatives are vehemently opposed to reopening the deal and have suggested the favourable status enjoyed by Americans when it comes to Canadian energy exports could be on the line.
U.S. trade experts and business leaders have been calling on President George W. Bush, Prime Minister Stephen Harper and Mexico's Felipe Calderon to make the case for NAFTA next week.
All the talk from Democratic presidential hopefuls about reopening the trade deal is feeding into protectionist sentiments that don't serve anyone, they said.
"If we start talking about backing out of NAFTA, what does that do to our credibility overall?" asked Jim Bacchus, a former executive at the World Trade Organization,
"If we insulate and isolate ourselves from the rest of the world, we will become less competitive, not more," he told a forum Friday.
Jim Jones, former U.S. ambassador to Mexico, said NAFTA has increased trade and prosperity, while most job losses in the United States in the last 14 years are the result of technological change and greater efficiency.
Some, including Bacchus, think it's probably a good idea to take what are now side provisions on workers and the environment and put them in the main body of the agreement.
And he's not persuaded the whole deal would have to be reopened to do it.
But the idea of dropping out altogether if there are no changes isn't credible, said economist Jeffrey Schott.
"I classify that as political grandstanding. Withdrawal is not a viable option," he said.
"It would be too costly to American jobs."
Clinton and Obama have been emphasizing their opposition to NAFTA leading up to Tuesday's primary in Pennsylvania, which has suffered from steel plant shutdowns and the loss of manufacturing jobs.
The U.S. recession has exacerbated unease over the impact of trade on U.S. workers.
"A weakening economy is making trade a convenient scapegoat for every economic ill," said Tom Donohue, president of the U.S. Chamber of Commerce.
"Reopening NAFTA would not only have potentially devastating economic consequences, it would violate the principles we've signed on to with two of our closest allies and neighbours."
Canada's New Democrats are on side with Obama and Clinton, saying it's time for some fundamental changes.
"The harsh truth that Bush, Harper and Calderon won't face is that during 14 years of NAFTA, the citizens of our three countries have experienced growing inequality and stagnating wages," said NDP trade critic Peter Julian.
"In the case of Mexico, the collapse of opportunity has been so severe that out-migration to the U.S. has more than doubled to an all-time high of nearly 500,000 people per year," he said.
"The poor and the middle class have borne the brunt of the damage and dislocation, while the richest few concentrate unprecedented levels of wealth."

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