The issue of trade policy — which should be at the center of any discussion about renewing the American economy — will finally garner some serious attention Thursday, as President Obama makes his first international trip to Canada.
During the 2008 presidential campaign, conflicting signals from the Obama camp with regard to how a new administration might renegotiate the North American Free Trade Agreement — which includes the United States, Canada and Mexico — complicated the Democratic contender’s run.
At multiple turns, Obama and his aides seemed to send mixed signals. Obama’s campaign criticized his Democratic primary rival, New York Senator Hillary Clinton, for her past role in advocating for NAFTA and her broader support of multilateral trade agreements. And Obama signaled, in major speeches –and even more aggressively in direct-mail advertising campaigns in industrial and agricultural caucus and primary states — that he was determined to reframe existing agreements to protect workers and the environment.
“NAFTA’s shortcomings were evident when signed and we must now amend the agreement to fix them,” declared Obama, during a primary campaign season in which he outlined detailed plans to rewrite the trade deal.
Then came several rounds of Canadian news reports revealing that an Obama aide, senior economic adviser Austin Goolsbee — who now serves as chief economist and staff director for the new administration’s economic recovery advisory board — had supposedly informed representatives of Canada rigidly-conservative, pro-NAFTA government that Obama was merely posturing in order to secure union support and blue-collar votes.
Even more unsettling was an interview Obama gave to Fortune magazine, after he had secured the nomination, in which he seemed to confirm the Goolsbee line. “Sometimes during campaigns the rhetoric gets overheated and amplified…” the candidate said, seeming to indicate that he would not even consider following through on a primary-season pledge to use an opt-out clause in the trade agreement between the US, Canada and Mexico to demand changes that would be more favorable to workers, farmers and the environment in all three countries.
So what is Obama saying now, as he prepares to head for Canada for meetings with Prime Minister Stephen Harper, a militant free trader who was a big fan of George Bush’s approaches on economics and just about everything else?
The new president sounds a lot better than Bush – or Harper – when it comes to trade policy. But Obama is still a little mushy when it comes to explaining how hard he will push to reduce the damage done by badly drawn trade deals.
“I think there are a lot of sensitivities right now because of the huge decline in world trade,” Obama told the Canadian Broadcasting Corporation on the eve of his trip. “As I’ve said before, NAFTA, the basic framework of the agreement has environmental and labor protections as side agreements — my argument has always been that we might as well incorporate them into the full agreement so that they’re fully enforceable.”
The term “might as well” does not exactly evidence the urgency Obama should be bringing to this task.
The fact is that, for those side agreements to ever be fully enforceable, they must be incorporated into the core language of NAFTA. But even that step represents an insufficient reform of a very bad trade agreement.
“NAFTA has had a devastating, negative impact on jobs in America (and Canada) — especially in the manufacturing sector — and an equally damaging impact on the agricultural sector in Mexico,” said Ohio Congresswoman Marcy Kaptur. “We have seen more than one million jobs leave the United States as a result of NAFTA — and that is a conservative estimate. Unless governments quit this race to the bottom and develop a more people-centered balanced approach to trade, opposition to NAFTA and globalization will continue to rise to new levels throughout the United States and the entire hemisphere.”
Kaptur has proposed a real response to what has become a very real trade crisis – U.S. trade deficits have skyrocketed to record levels in recent years. Her NAFTA Accountability Act would require the president to withdraw the U.S. from the trade agreement unless clear benchmarks that were established not by Kaptur but by proponents of NAFTA when the agreement was being developed — gains in U.S. jobs and living standards, increased U.S. domestic manufacturing, stronger health and environmental standards, especially with respect to food imports, decreased flow of illegal drugs from Mexico and Canada, and the guarantee of Mexican democracy and human rights – are met.Calls for the renegotiation of NAFTA, and even for scrapping it if reforms are not achieved, have been voiced by a number of Canadian opposition leaders.
Demanding a radical rewrite of the deal –including the removal of NAFTA’s “Chapter 11″ provision, which permits foreign investors to legally challenge Canadian or U.S. laws and regulations designed to protect workers and the environment – Canadian New Democratic Party leader Jack Layton, announced last year that: “We want a new NAFTA. We want a North American fair trade agreement,” the federal NDP leader told an election gathering in Hamilton. “We want a fair deal, not a sellout.”
Obama will meet with Stephen Harper when he visits Canada. But he should turn to Jack Layton – and Marcy Kaptur – for serious advice about how to write trade agreements that are good for workers, farmers, communities and the environment in the U.S, Canada and Mexico.