Saturday, March 1, 2008
NEVER illuminating, the Democratic presidential primary debate over trade policy took an especially dim turn this week. In their final head-to-head meeting before Tuesday's Ohio and Texas primaries, Sens. Hillary Rodham Clinton (N.Y.) and Barack Obama (Ill.) declared that they would opt out of the North American Free Trade Agreement with Canada and Mexico unless those two countries renegotiated the pact's labor and environmental provisions to the United States' liking. For two candidates who pledge to repair U.S. standing in the world, it was an odd swipe at our next-door neighbors. Not surprisingly, Mexican and Canadian officials recoiled at the prospect of overturning settled political and economic expectations in their countries.
What could the Democrats mean? Labor and the environment are covered by "side agreements" to NAFTA, negotiated by President Bill Clinton, that call on all three countries to make and enforce good laws. The more recent U.S.-Peru Trade Promotion Agreement went further, requiring Peru to change its labor laws to meet International Labor Organization standards. Both Mr. Obama and Ms. Clinton, who supported the Peru deal, see it as a model for a NAFTA renegotiation with Mexico, according to their advisers. But if that's all the candidates have in mind, they are wildly overpromising: The Peru pact's labor and environmental standards are only incrementally stronger than the NAFTA side agreements. Meanwhile, the risks of renegotiation are huge. NAFTA is controversial in Mexico, too; farmers there are outraged by American agricultural imports. If the Mexican side asked that tariffs be reimposed on U.S. grain as part of a renegotiation, would President Obama or President Clinton sacrifice American farmers whose votes they were seeking only yesterday in Iowa? Or would he or she pull out of NAFTA? If the latter, the tariffs on both sides would revert to the levels of 14 years ago.
Whole U.S. industries have grown up to take advantage of NAFTA. Meanwhile, none of the U.S. jobs that left for Mexico would come back; they'd simply go to China, India or elsewhere.
The Democratic candidates understand that trade with the developing world has both costs and benefits, which are not evenly distributed across the United States. Two days before this week's debate, Mr. Obama said, "I don't think it's realistic for us to repeal NAFTA," because that "would actually result in more job loss . . . than job gains." Ms. Clinton awkwardly pleaded that NAFTA has benefited some parts of the country -- such as Texas. Yet the urge to win Ohio trumped, and both Democrats made a threat that, if taken seriously, can be described only as reckless. In other words, we have to hope that they were only pandering.