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A View on NAFTA

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Anonymous

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Did NAFTA Damage the Prospects of Free Trade?
by W. James Antle III
02 September 2005

More than a decade into the increasing NAFTA-ification of our trade policy, the overall U.S. merchandise trade deficit stands at $700 billion.



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.

W. James Antle III is a primary columnist for Intellectual Conservative.com. He works as an assistant editor of The American Conservative magazine and is also a senior editor of EnterStageRight.com. The views expressed here represent his alone.
 

Sandhusker

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SH, did you happen to notice, "the transfer of Congress’ constitutional power to regulate trade to supranational organizations"

What do you think he is talking about there? I guess Mr. Antle doesn't realize these supranational organizations can only make suggestions? :lol: :roll:

How about this, " 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".

And 14 people voted that you had credibility? :lol: :lol: :lol:

Maybe the author is just another blaming liberal? :wink:
 

ocm

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Good quotes Sandhusker. But I like this one!

"Instead of free trade, the result is managed-trade agreements which seek to renegotiate the terms of protectionism rather than end it."

CAFTA is really protectionistic managed trade.


But my question is how did such a flaming liberal (he must be since he's against CAFTA) get to be a contributor to three different conservative publications?


One of the few issues on which GW Bush and Clinton agreed--CAFTA. (Keeping Norman Mineta was another one, equally as bad). And I'm called a liberal when I disagree with Bush on a topic on which he agreed with Clinton. If Clinton thought is was good--get a clue.

There are a growing number of conservatives who are waking up and smelling the ???????.
 

Sandhusker

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The facts are there to see in black and white. It is easy to see what the NAFTA supporters said it would do and what has actually happened. And then came along CAFTA.

I'm a right-leaning Independant, but if I was a Republican, I'd be ashamed at what leadership did to get this passed. What an exibition of what is rotten in Washington...
 
A

Anonymous

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Yes, the facts are there in black and white.

Prior to the closing of the Canadian border, we had a 7 year average $1.3 "BILLION" dollar trade surplus in the beef and live cattle trade.

Bullard says we don't need those extra dollars.


Sandhusker, without quotes that say what you want to hear, you'd really be empty handed wouldn't you? It's not like you ever provide proof to back your "OPINIONS".

Some people just aren't smart enough to understand the difference between "giving something to get something" in trade negotiations and "giving up sovereignty" to foreign rule.

Typical left wing "FEAR MONGERING".


OCM, you can paint yourself as conservative all you want but conservatives do not rely on government mandates to solve their "PERCEIVED" problems and the lack of conservative republicans to support your flawed government mandates proves my point.

Accept the truth ocm, you are government mandate loving liberal in conservative clothes.


~SH~
 

Sandhusker

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SH,"Some people just aren't smart enough to understand the difference between "giving something to get something" in trade negotiations and "giving up sovereignty" to foreign rule. "

You're right about the "some people just aren't smart enough to understand", but stop right there. How many times to you have to see the sovereignity issue raised by REPUBLICANS before you get it thru your head that there is one?

I've asked you this before and you couldn't answer. Let's try it again. If we are not giving up sovereignity in NAFTA, CAFTA, WTO, exactly what is it that we are giving up?
 
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Anonymous

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I've answered your stupid question repeatedly although I'm not surprised that you would continue to ask it.

The only time we give something up is when we chose to give up something to gain something in a trade negotiation.

For exmple, ONCE AGAIN, if we agree to only export cattle to Japan that are 24 months and under, we have to give up exporting cattle older than 24 months. We might also have to incorporate a means to identify cattle younger than 24 months of age. That's what we gave up in that situation.

I'm certain that you are still too ignorant to understand what I have just stated because you are a bonafide blamer, not a thinker.


~SH~
 

ocm

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~SH~ said:
The only time we give something up is when we chose to give up something to gain something in a trade negotiation.

~SH~

Like people who give up their freedom in exchange for their life. How did those "conservative" hippies say it in the 70's? Better red than dead. That would have been a trade deal!

Patrick Henry would love that!
 

Sandhusker

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I ask the same question and I get the same BS in place of an answer. SH, the question was concerning the WTO, NAFTA, and CAFTA. Where did you see "Japan" or "cattle" in my queston?

For your benefit, I repeat the questin; If we are not giving up sovereignity in NAFTA, CAFTA, WTO, exactly what is it that we are giving up?
I don't want to hear anything about Japan, cattle, R-CALF, blamers, or any other nonsense. Answer the question and show who those who voted for your credibility their error.
 
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ocm: "Like people who give up their freedom in exchange for their life."

Yeh we are really going to give up our lives in exchange for our export markets aren't we OCM?

That's not even how it works. Some gave up their lives so the rest of us could live in freedom.

What an assinine suggestion.



Sandman: "If we are not giving up sovereignity in NAFTA, CAFTA, WTO, exactly what is it that we are giving up?"

This is the last time I am going to attempt to answer your stupid question.

WE DON'T GIVE UP ANYTHING IN ANY OF THESE AGREEMENTS UNLESS WE WILLINGLY AGREE TO GIVE SOMETHING TO GET SOMETHING IN THE PROCESS OF NEGOTIATION.

Negotiation during trade is not "giving up sovereignty".

I don't expect you R-CULT supporting isolationists to understand the importance of a 7 year average $1.3 "BILLION" dollar trade surplus in the cattle and beef industries prior to BSE being discovered in Canada.


~SH~
 

Charlie1948

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Oldtimer I apologise for SH,s coments onthe bull sesion.
Retards like that don,t have a clue on what is happening to the U.S. enonomy.We are losing jobs faster than we can count.You know I feel sorry for all these other countries but I beleave we need to take care of our selves till we get on our feet.Were broke.They want free trade or world trade that sounds fine but we are allready broke and we don,t have big enough pockets to grubstake the hole dam world.
Take care
 

Sandhusker

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SH, "WE DON'T GIVE UP ANYTHING IN ANY OF THESE AGREEMENTS UNLESS WE WILLINGLY AGREE TO GIVE SOMETHING TO GET SOMETHING IN THE PROCESS OF NEGOTIATION. Negotiation during trade is not "giving up sovereignty". "

Uh, SH, I hate to point this out to you, but your post shows that you don't have the foggiest notion on how the WTO works. There is no "negotiation". There are no "agreements". The only agreement is where all the nations agree to abide by the WTO's rulings. If two countries have a spat, they take their case before the WTO - just like a court.

Now, how can a country agree to abide by the WTO's ruling without giving up sovereignity?
 

Big Muddy rancher

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Charlie1948 said:
Oldtimer I apologise for SH,s coments onthe bull sesion.
Retards like that don,t have a clue on what is happening to the U.S. enonomy.We are losing jobs faster than we can count.You know I feel sorry for all these other countries but I beleave we need to take care of our selves till we get on our feet.Were broke.They want free trade or world trade that sounds fine but we are allready broke and we don,t have big enough pockets to grubstake the hole dam world.
Take care


Charlie on my way to Deadwood I stopped in a Medora North Dakota. They hire thru the US parks Service about 325 summer employees. Most of them come to the US from places like Taiwan, Belgum ,Bulgaria Russia and many other countries. Why? Because the can't get Ameriacan kids to work and one store keeper was telling me the ever US college kids don't know how to make change. And you say the US is losing jobs. Most don't want to work
 

Silver

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Sandhusker, what you are suggesting doesn't even make sense. If you are suggesting that countries should enter into trade agreement with no dispute mechanisms presided over by an independant 3rd party..... well I'd have to side with SH on this one. That would be stupid. I would expect my country to stand by it's agreements just as I would expect yours to. But what if they don't? Is it giving up sovereignity to be accountable for your actions? No. I don't think you can flog this dead horse much longer.
 

Sandhusker

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Silver said:
Sandhusker, what you are suggesting doesn't even make sense. If you are suggesting that countries should enter into trade agreement with no dispute mechanisms presided over by an independant 3rd party..... well I'd have to side with SH on this one. That would be stupid. I would expect my country to stand by it's agreements just as I would expect yours to. But what if they don't? Is it giving up sovereignity to be accountable for your actions? No. I don't think you can flog this dead horse much longer.

Silver, SH doesn't think the WTO has any enforcement power. He says they can only make "suggestions", which is a laugher. The truth is the WTO does have enforcement power as you seem to realize as evidenced by the fact that their rulings can not and are not ignored.

My biggest problem with submitting to the WTO is that there is a very strong arguement that it falls under ceeding power to a foreign body, which is unconstitutional.
 

ocm

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Silver said:
Sandhusker, what you are suggesting doesn't even make sense. If you are suggesting that countries should enter into trade agreement with no dispute mechanisms presided over by an independant 3rd party..... well I'd have to side with SH on this one. That would be stupid. I would expect my country to stand by it's agreements just as I would expect yours to. But what if they don't? Is it giving up sovereignity to be accountable for your actions? No. I don't think you can flog this dead horse much longer.

CAFTA says, in its text, “The parties [nations] shall ensure that their laws, regulations or agency procedures conform to CAFTA requirements.”

This is more than mere arbitration. This is bowing before a supreme authority.
 

Silver

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Sandhusker said:
Silver said:
Sandhusker, what you are suggesting doesn't even make sense. If you are suggesting that countries should enter into trade agreement with no dispute mechanisms presided over by an independant 3rd party..... well I'd have to side with SH on this one. That would be stupid. I would expect my country to stand by it's agreements just as I would expect yours to. But what if they don't? Is it giving up sovereignity to be accountable for your actions? No. I don't think you can flog this dead horse much longer.

Silver, SH doesn't think the WTO has any enforcement power. He says they can only make "suggestions", which is a laugher. The truth is the WTO does have enforcement power as you seem to realize. You can't ignore their rulings.

My biggest problem with submitting to the WTO is that there is a very strong arguement that it falls under ceeding power to a foreign body, which is unconstitutional.

The WTO doesn't have any enforcement power per se, but it can legitamize a countries retaliatory options. The WTO has never imposed any sanctions itself, only set parameters for countries to defend themselves within. I don't believe that diminishes anyones sovereignity.
Without some sort of mechanism why would anyone want to sign a trade agreement?
 

Sandhusker

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Silver, "The WTO doesn't have any enforcement power per se, but it can legitamize a countries retaliatory options. The WTO has never imposed any sanctions itself, only set parameters for countries to defend themselves within. I don't believe that diminishes anyones sovereignity.
Without some sort of mechanism why would anyone want to sign a trade agreement?"

Do some research on them, Silver. You'll find they do much more than legitimize actions. I'll toss your arguement back at you; If they did not have any enforcement power, what would be their purpose for existence? The truth of the matter is, what they say goes. You either abide by their ruling, or you pay. You don't blow them off. If you try to get cute with them, they'll use the IMF against you. But, don't take my word for it. There's a ton of information on the net - take a look at it.

The loss of sovereignity comes from agreeing to abide by their rulings. You are transfering power (sovereignity) to the WTO panels that make the calls. They can, and have, overridden legislation created by elected officials. That is submitting to a foreign power, which is unconstitutional in this country.
 

Jason

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The WTO says Europe's ban on N. American beef is illegal. Europe still bans it.

The WTO says the USA is illegally placing tarriffs on Canadian softwood lumber. The tarriffs remain.

The WTO only makes suggestions. Each country has to decide if they will abide by the trade deals THEY ORIGINALY NEGOTIATED.
 
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Charlie 1948: "Oldtimer I apologise for SH,s coments onthe bull sesion. Retards like that don,t have a clue on what is happening to the U.S. enonomy.We are losing jobs faster than we can count."

I apologize for your ignorance.

We are losing jobs to AUTOMATION and we have been for a long time.

If you don't think we need another $1.3 "BILLION" dollars added to the cattle/beef industry from foreign trade, you are the retard.

Highest cattle prices ever recorded and still the import blamers are singing the same blaming songs.

"We can't compete", "there's no hope", "the end is near", "we're all doomed", vote DEMOCRAT AND JOIN R-CULT!


Sandman: "The only agreement is where all the nations agree to abide by the WTO's rulings. If two countries have a spat, they take their case before the WTO - just like a court."

Did R-CULT consult the WTO before they filed their dumping case or their injunction to stop Canadian imports????

Hmmmmm????

Your own actions prove how stupid your "giving up our sovereignty" argument is.


"Sandman: "Silver, SH doesn't think the WTO has any enforcement power. He says they can only make "suggestions", which is a laugher. The truth is the WTO does have enforcement power as you seem to realize as evidenced by the fact that their rulings can not and are not ignored."


R-CULT's own actions shattered your worthless argument.

The fact remains, the WTO has no enforcement authority.

As Jason pointed out, the WTO did not support the EU ban on beef imports yet the EU ban remains.

SO MUCH FOR GIVING UP YOUR SOVEREIGNTY.

You are wrong about this just like you are wrong about most of your blaming views.

The WTO would have said that R-CULT's ban on Canadian imports was illegal, that didn't stop R-CULT from doing it.

So much for giving up sovereignty.

This "giving up our sovereignty" laugher is an import blamers argument when they can't pull anything factual out of their hats.



~SH~
 

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