Thread: Did NAFTA Damage the Prospects of Free Trade?

WEBCommentary Contributor
Author: W. James Antle III
Bio: W. James Antle III
Date: September 1, 2005

Did NAFTA Damage the Prospects of Free Trade?

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The political case for free trade looks weaker more than a decade after NAFTA.
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A dozen years ago, the usually academic debate over the economics of international trade spilled onto front pages and resonated on talk radio as never before. The North American Free Trade Agreement (NAFTA), creating a free-trade zone that included the United States, Mexico and Canada, divided the country and produced coalitions that cut across both party and ideological lines.

NAFTA was conceived by Ronald Reagan, negotiated by George H.W. Bush, shepherded through Congress by Bill Clinton and endorsed by every president since Richard Nixon. Larry King shunted aside his celebrity guests to host a televised debate on the agreement between Al Gore and Ross Perot, exposing millions of Americans to an exchange between the sitting vice president and the most successful third-party presidential candidate since Teddy Roosevelt’s Bull Moose campaign on the merits of the Smoot-Hawley tariffs.

The passage of NAFTA (which I heartily supported) over populist objections expedited congressional approval of GATT and U.S. involvement in the World Trade Organization the following year. It seemed to represent a lasting change in the politics of trade. But in retrospect it might have been the high water mark for free trade.

In late July, the House of Representatives barely passed the Central American Free Trade Agreement (CAFTA) by a vote of 217 to 215. Even this narrow margin was secured only after the leadership extended voting 45 minutes beyond the normal time period and loaded transportation and energy bills with compensatory pork (see my article on this in the Sept. 26 issue of The American Conservative).

A month earlier, the Senate approved CAFTA by 55 to 45, the lowest margin in that body ever for a free-trade agreement. There too pork-barrel spending and concessions from the Bush administration were needed to put the agreement over the top. Some of the political resistance was a predictable consequence of textile-state economic anxieties. But how much of it was due to NAFTA’s failure to live up to expectations?

CAFTA essentially extended NAFTA-style trade policies to six Central American countries. “Ninety-five percent CAFTA is NAFTA,� a trade policy analyst told this writer. The difficulty the White House and GOP congressional leadership faced in ramming CAFTA through was thus a reflection of dissatisfaction with NAFTA.

Trade is often blamed for job losses and income stagnation attributable to other, more complicated economic factors. Sometimes trade agreements win larger tariff reductions from other countries than from the United States. But the political case for free trade has undeniably been harmed by NAFTA boosters’ failed predictions.

For example, in violation of many such predictions, our trade surpluses with Mexico turned into trade deficits. And more than a decade into the increasing NAFTA-ification of our trade policy, the overall U.S. merchandise trade deficit stands at $700 billion.

NAFTA was also supposed to curtail the flow of illegal immigrants into America from Mexico. But instead immigration – both legal and illegal – increased following NAFTA’s passage. To the consternation of the political class, immigration is fast becoming one of the biggest issues in American politics.

Indeed, members of the Congressional Immigration Caucus warned against the immigration consequences of CAFTA. And Peter Brimelow, quoting David Frum, recently speculated that “in the end American capitalism will probably have to choose between free trade and open immigration.�

Moreover, there have been important changes in the global economy since we entered NAFTA. Longtime free-traders have noted that the factors of production may now be as mobile as traded goods, a shift with implications for comparative advantage often ignored in the negotiation of trade agreements.

Perhaps most importantly, the recent debate over CAFTA demonstrated the extent to which the formulation of post-NAFTA trade policy has shifted from cutting tariffs to cutting deals. It does not take thousands of pages, the transfer of Congress’ constitutional power to regulate trade to supranational organizations and a host of new economic regulations to reduce government intervention into the free market. Instead of free trade, the result is managed-trade agreements which seek to renegotiate the terms of protectionism rather than end it.

Which brings us to the following paradox: perhaps multilateral trade agreements, even when they include sizeable net tariff reductions, are no longer the best way to promote free trade. NAFTA, CAFTA and the upcoming fight over the Free Trade of the Americas Agreement entangle trade policy in discussions of immigration, globalization and national sovereignty.

Ross Perot warned of the “giant sucking sound� that would attend the arrival of NAFTA. Perhaps it’s the sound of air running out of an old establishment orthodoxy on trade.

Riding in a Jeep with Mr Bush and Cattle Ranching
Both Texas and Colombia are Caribbean Lands
Caribbean has also meant Piracy and Crazyness in History
Or Things are not so innocent, pure and chaste as they seem


Brian :



I am extremely worried about the Future of my country Colombia
Everybody accuses me of being a pesimist here in South America.
Perhaps that is true and I am too pesimist, but it is the only way to defend the extremely poor, nobody thinks of them.

It will be very hard to stop the Andean FTA


I am afraid that we in Colombia will have a Hurricane called Andean FTA when our Agriculture is ruined by cheap American Cereals with subsidies of US $100 per ton. And our "Industrial Export" Expectations to the USA turn out to be inflated. The Policy here is "Give Everything to the American Lion" ... that is sign any pact that is presented by Mr George W. Bush and his negotiators.

"We have no Future but Adhesion to the USA" .... That is a mantra here that I don't share, even if I love and admire Americans.





Better a Pesimist than a Social Darwinist :



Some friends tell me that I am a Super Pesimist. But I think that the only way to get some relief or subsidies for our peasants when the Andan FTA enters into action is to oppose it inside Colombia and inside the USA and to give a tough and prolonged fight to those that are Super Egoist and think only of themselves and getting richer richer richer ad infinitum.

It is almost impossible to stop the thing here given the Power and Popularity of the Colombian President, and the Ignorance and Naivete of our dear countrypeople in Colombia. Our President probably reelected soon.

I am not an American Citizen and I can not vote inside the USA but I can make a lot of noise if an unjust pact is signed that harms the poorest of the poor. This signature is a sure 100% event in year 2005 or early 2006. Do not doubt that.

The land of poor evicted peasants would eventually be cheaply bought by the PARAS, that is the big cattle ranchers, their armies, etc .... Their leaders have been in the Business of Coca Transformation into Cocaine and the Narco Trade. Do not have the slightest doubt.

Even a blind man can see that the sympathies of the Colombian Government are with the Big Cattle Ranchers and their Para friends. Do not have the slightest doubt, the Paras ara a great help against the guerrillas.

And that these Paras and Big Cattle Ranchers will buy the land of the evicted peasants.



Bush and Uribe the Cattle Ranchers



Our president is a BIG BIG BIG BIG Cattle Ranch Owner. The son of a VERY VERY VERY VERY questionable man. Extremely questionable. Many hair rising stories. Even my brother before dying told me many hair rising stories and information that he had.

No wonder that President Uribe enjoys riding in a jeep with Mr Bush in Crawford Ranch Texas. Our president probably bought the same model of Jeep for his own growing and expanding ranchs.

I wonder what the CIA and the FBI know ???

Will you give a fight against Andean FTA ???


Vicente Duque