NAFTA reform just the start - U.S. trade critics
By Doug Palmer
March 5, 2008
WASHINGTON (Reuters) - The next U.S. president needs to fundamentally redirect U.S. trade policy to preserve manufacturing jobs and reduce the huge trade deficit -- not just tinker with the North American Free Trade Agreement, critics of U.S. trade deals said on Wednesday."We need to change the whole discussion about investment, about subsidies, about enforcement of trade laws," said Leo Gerard, president of the United Steelworkers union. "How does any country continue to prosper when it's accumulating an average annual trade deficit of about $700 billion per year?"
On Tuesday, Sen. Hillary Clinton revived her chances of winning the Democratic party's presidential nomination by beating her rival Sen. Barack Obama in three of the four states that held contests that day.
In recent weeks, both Clinton and Obama have increased their criticism of NAFTA and said they could pull the United States out of the pact if Mexico and Canada did not agree to renegotiate it.
[EVERYONE KNOWS THAT THEY ARE NOT SPEAKING THE TRUTH]
The two candidates have talked mainly about adding enforceable labor and environmental provisions to the pact.
[LABOR & ENVIRONMENTAL PROVISIONS WILL DO NOTHING TO KEEP JOBS IN AMERICA, WHEN THE BASIC COSTS OF LABOR ARE SO MUCH LESS TO BEGIN WITH. CLINTON & OBAMA PROMISES OF ENFORCEMENT OF THESE TYPES OF PROVISIONS WILL ONLY ANGER OUR TRADING PARTNERS AND FURTHER ALIENATE THE U.S. FROM THE WORLD, EXCEPT, PERHAPS, FROM THE EUROPEAN UNION, WHICH FAVORS SUCH NUANCED TYPES OF TRADE PROTECTIONISM. UNIONS SHOULD BEWARE OF DEMOCRATIC PARTY PROMISES THAT CANNOT BE DELIVERED.]
But Lori Wallach, director of Public Citizen's Global Trade Watch, said it was more important in the short term to change the agreement's investment provisions because they encourage U.S. companies to move jobs to Mexico.Similar reforms are needed in other trade agreements, including the one that set the terms of China's entry into the World Trade Organization in 2001, she said.
[MS. LORI WALLACH IS ANTI-INDUSTRY, ANTI-FREE MARKET, ANTI-PRIVATE PROPERTY, AS THE ITSSD UNFORTUNATELY FOUND OUT WHILE ATTENDING SEVERAL U.S. GOVERNMENT STAKEHOLDER MEETINGS HELD IN WASHINGTON, DC IN THE PAST. SHE IS 'SHORT' ON BUSINESS & ECONOMICS KNOWLEDGE, BUT 'LONG' ON EMOTION AND RHETORIC.]
Wallach blamed NAFTA, China's WTO accession and other trade agreements for many of the roughly 3 million manufacturing jobs the United States has lost since 2000.
[UNFORTUNATELY, MS. WALLACH IS OUT OF TOUCH WITH REALITY. U.S. MANUFACTURERS FROM NUMEROUS INDUSTRY SECTORS HAVE BEEN FALLING OVER EACH OTHER TO MOVE MANUFACTURING JOBS & INVESTMENTS OVERSEAS, ESPECIALLY TO CHINA, SINCE THE MID-1990'S WHEN THE WORLD TRADE ORGANIZATION WAS CREATED. THE WTO PROVIDED FOR THE EVENTUAL PHASE-OUT (OVER A TEN YEAR PERIOD SPANNING 1995-2004) OF IMPORT QUOTAS, INCLUDING U.S. IMPORT QUOTAS IMPOSED ON CHINESE TEXTILES, WHICH FINALLY FELL TO ZERO, PURSUANT TO THE WTO AGREEMENT ON TEXTILES AND CLOTHING (ATC), ON DECEMBER 31, 2004. THE U.S. IS STILL PERMITTED, BY A BILATERAL AGREEMENT REACHED WITH CHINA DURING NOVEMBER 2005, TO IMPOSE QUOTA RESTRICTIONS ON CERTAIN CHINESE TEXTILE EXPORTS UNTIL DECEMBER 31, 2008. SEE: http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2005/asset_upload_file813_8339.pdf CHINA'S VIRTUAL MONOPOLIZATION OF THE WORLD TEXTILE MARKET HAS EVEN PLACED TURKEY'S FORMIDABLE TEXTILE INDUSTRY IN A NONCOMPETITIVE POSITION. PERHAPS INDIA POSES THE ONLY REAL CHALLENGE. WHILE RICARDIAN SPECIALIZATION PROVIDES THE WORLD WITH AN OVERALL BENEFIT - AFFORDABLE TEXTILES, THERE WILL BE LOSERS, NAMELY LABOR, IN MOST OTHER COUNTRIES.
CHINA'S ACCESSION TO THE WTO DURING DECEMBER 2001 SOLIDIFIED CHINA'S PLACE AMONG THE WORLD'S MAJOR TRADING NATIONS, AND THUS BEGAN THE PROCESS OF SLOWLY OPENING UP CHINA'S MARKETS TO FOREIGN INVESTMENT. IF ANYTHING, CHINA MUST BE PREVENTED FROM MANIPULATING ITS FOREIGN INVESTMENT RULES AS DISGUISED MARKET ACCESS BARRIERS. IN ADDITION, CHINA MUST BE HELD TO STRICT WTO STANDARDS AS CONCERNS ITS INSUFFICIENT PROTECTION OF U.S. INTELLECTUAL PROPERTY RIGHTS. SO, YES, MS. WALLACH, THERE IS A NEED FOR ENFORCEMENT OF WTO RULES TO SAVE U.S. JOBS & KNOW-HOW. HOWEVER, ENFORCING WTO LABOR OR ENVIRONMENTAL RULES WILL NOT BRING BACK U.S. JOBS.]
The Bush administration -- noting that U.S. manufacturing output and exports set records last year -- argues that increased worker productivity and advances in manufacturing technology account for many of the lost jobs.
Also, total U.S. employment has grown 24 percent since Congress approved NAFTA in 1993, and U.S. unemployment has averaged 5.1 percent since the pact went into force compared to 7.1 percent in 1980 to 1993, the U.S. Trade Representative's office said in a NAFTA fact sheet.
The Steelworkers' Gerard called USTR's statistics "bullshit" because they gloss over real job losses in key industrial sectors such as steel and autos.
[U.S. AUTO MANUFACTURERS UNFORTUNATELY DO NOT MAKE QUALITY PRODUCTS THAT CAN EFFECTIVELY COMPETE WITH THE LIKES OF TOYOTA, NISSAN & HONDA, LET ALONE, KIA & HUNDAI. THERE ARE NO CHINESE MANUFACTURED CARS EXPORTED TO THE U.S. DUE TO MUCH LOWER BASIC LABOR COSTS IN INDIA & CHINA, THE U.S. STEEL INDUSTRY BEGAN MIGRATING THERE YEARS AGO. THE DEMOCRATS ONLY NEED LOOK AT FORMER U.S. STEEL TOWNS SUCH AS PITTSBURGH TO SEE HOW JOBS CAN BE CREATED WITHOUT TRADE PROTECTIONISM. PITTSBURG HAS SINCE RECREATED ITSELF AS A HI-TECHNOLOGY RESEARCH & START-UP MECCA. THE PROBLEM IS NOT ONLY A CHINESE PROBLEM. IT IS ALSO AMERICAN RELUCTANCE TO ADAPT TO CHANGE.]
NAFTA ALSO MEANS CHINA
The next president also needs to take a tougher stance on trade with China, which is responsible for a large portion of U.S. trade gap, said, Sen. Sherrod Brown, Ohio Democrat.
"In my state and in much of middle class America, NAFTA stands for trade policy generally," Brown said.
Many lawmakers believe Beijing deliberately undervalues its currency to give its companies a trade advantage.
Brown said he and other freshmen Democratic senators would continue pushing this year for legislation aimed at forcing China to revalue its currency, and have drawn a line in the sand against approving a free trade pact with Colombia.
[BROWN & OTHER DEMOCRATS ARE PLAYING POLITICAL ROULETTE HERE. THIS IS A FOOLISH GAME OF LOSE-LOSE. CONGRESSIONAL DEMOCRATS SIMPLY WILL NOT ADMIT TO THEIR LIBERAL CONSTITUENCIES THAT THEY CANNOT BRING AMERICAN JOBS BACK. THIS IS NOTHING MORE THAN VOTE PANDERING.]
In a separate speech, U.S. Trade Representative Susan Schwab said NAFTA had been good for all three countries and warned reopening it could backfire on the United States.
"The notion that you can reopen an agreement like NAFTA and not expect Canada or Mexico to ask for things from us that they didn't get last time" is unrealistic, she said.
Instead of preserving U.S. jobs, changing the pact could put at least some jobs at risk, Schwab said.
She described Clinton and Obama's sparring over who was toughest on NAFTA as a "rhetorical race to the bottom."
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