Wall Street Journal on Anti-Trade Bullying

By February 28, 2008Trade

From an editorial, “Unilateral Democrats.”

Democrats claim the world hates America because President Bush has behaved like a global bully. But we don’t recall him ever ordering an ally to rewrite an existing agreement on American terms — or else.

Yet that’s exactly what both Hillary Clinton and Barack Obama are now promising to do to our closest neighbors, Mexico and Canada. At their Ohio debate on Tuesday, first Mrs. Clinton, followed ever so quickly by Mr. Obama, pledged to pull America out of the North American Free Trade Agreement if the two countries don’t agree to rewrite it on Yankee terms. How’s that for global “unilateralism”?

The embrace of pro-export, pro-economic growth, pro-jobs free-trade policies has a long bipartisan history (go far enough back, and the Republicans were the party of high tariffs), so it’s discouraging to see leaders of one party heat the rhetoric up so high.

In the end, facts and history will win out over populist tub-thumping.

By opening the continent to investment and trade, capital has found more efficient uses, with benefits to producers and consumers alike. In Nafta’s first decade after 1993, trade between the U.S. and Mexico multiplied to $232 billion from $81 billion. Trade with Canada has also blossomed, with Canadian exports to the U.S. by surface transport rising 79% in a decade and U.S. exports to Canada increasing 38%.

The deal also increased U.S. productivity. U.S. firms found they could be more globally competitive by putting some manufacturing in Mexico or Canada while retaining high-end production in the U.S. This has resulted in what John Engler, president of the National Association of Manufacturers, has called “the highly integrated North American industrial base, particularly between Canada and the U.S.” Such flexibility may have saved thousands of U.S. jobs from going abroad. In the first 10 years of the deal, the U.S. economy added 18 million jobs and the jobless rate sank to record lows.

Yes, it’s hard to envision electoral success for a campaign based on reversing economic growth.

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