Thursday, October 12, 2017

NAFTA Update

Donald Trump continues to be alarmingly right on the issue of "free trade" agreements, as you can tell by the character of his enemies.

I personally wish this were not so, given that he is a race-baiter, a man fundamentally without dignity, and by all accounts, an illiterate.

Still, it appears that Trump might in fact be sincere about withdrawing from NAFTA, and if so, he'd be on the right side of history and economics.

A potential withdrawal is lauded by the AFL-CIO and denounced by the U.S. Chamber of Commerce.  The U.S. Chamber of Commerce is not exactly a small-town affair, despite the fact that most of the municipalities we grew up in have their own local, and fairly benign, Chambers of Commerce.  The U.S. Chamber of Commerce is much more akin to today's NRA; a fairly extremist ur-organization standing for Big Business, all other considerations be damned.  If the U.S. Chamber of Commerce is against it, and the AFL-CIO is for it, odds are it might actually be good for the average American worker.  Just consider this:

Last fall, Nike, Apple, and three major utilities quit the Chamber or its board of directors over what one company called its “extreme rhetoric and obstructionist tactics.” Companies such as Dow and General Electric distanced themselves from the group as environmental and labor groups piled on with criticism of the Chamber’s cozy relationship with special interests.  (Mother Jones)

That is from a 2010 article, but times haven't changed under U.S. Chamber of Commerce head Thomas Donohue.

As Orwellian as it gets: the U.S. Chamber of Commerce building touting "jobs"
The NY Times, in its alarmist article about possible NAFTA repeal, appears to be taking the side of agribusiness, in a fairly manipulative way:

If the deal does fall apart, the United States, Canada and Mexico would revert to average tariffs that are relatively low — just a few percent in most cases. But several agricultural products would face much higher duties. American farmers would see a 25 percent tariff on shipments of beef, 45 percent on turkey and some dairy products, and 75 percent on chicken, potatoes and high fructose corn syrup sent to Mexico.  (NY Times)

I hate the use of "American farmers" here.  It conjures the image of the little man and woman workin' hard on their small-to-mid-sized farm.  The truth is, modern agribusiness is dominated by a tiny number of producers with gigantic proportions.  Should we, the average American consumer, worker, and taxpayer, be all that worried about these firms having to pay a few tariffs when they sell goods in Mexico?  I suggest no.

Astoundingly, given how much the Trump administration to date has doubled down on being friends of the wealthy, and enemies, rhetoric aside, of the little guy, the Trump administration appears to be serious about overturning the most egregious part of the NAFTA: the clauses that obviate national sovereignty (emphases added mine):

Business groups say they are firmly opposed to an American push to curtail a provision called investor-state dispute settlement, which allows companies to sue Canada, Mexico and the United States for unfair treatment under Nafta. Meanwhile, Canada has said that it will not consider dispensing with another provision, Nafta’s Chapter 19, which allows countries to challenge each other’s anti-dumping and countervailing duty decisions before an independent panel.  (NY Times)

This fellow is not enthralled with recent news.
Let's be very clear about this paragraph.  "Business groups" (the U.S. Chamber of Commerce and others) are opposed to the overturning of treaty elements that allow companies to sue the nations in which they do business and overturn the laws of those nations.  Last time I checked, Mexico, the United States, and Canada were all ostensible democracies, whereas companies were beholden only to a tiny number of people: their shareholders.  Why should "investor-state dispute settlement provisions" even exist?  That puts the concerns of companies ahead of all other concerns.  I suppose that's fine if you're a hardcore libertarian, but if you're not, I assume you're on Team Nation-State.  I know I am.

If you'd like to see Dean Baker put the NY Times on blast for their NAFTA-death alarmism, here's the link.  And of course, here he points out how "free trade" isn't actually free trade at all.

Now: would a transition out of NAFTA be smooth?  Most likely not.  Just look at poor Britain - having undergone Brexit, they're now considering... drum roll please.. joining NAFTA!

So it's a tricky issue.  But there's no denying that, in this one instance, Donald Trump might actually be standing up for the American worker, whether he realizes it or not.  This is an issue that Democrats should do their best not to be on the wrong side of, unless they want to continue to see their clocks cleaned:
Mainstream centrist Democrats have a highly specific reason to evade criticism of our trade deals: a guilty conscience. After all, it was the 1993 fight over the North American Free Trade Agreement that saw the Clinton wing of the Democratic Party stick the knife deep into the back of its longtime ally, organized labor. Among labor types, the NAFTA betrayal, plus the many Democratic trade deals that followed, has rankled for years; whenever I talk to union members, bitterness over trade almost always comes welling to the surface.  (

If you'd like a lengthy read, here's a reminder of why NAFTA is garbage.  There are many, many, many, many, many, many good reasons to be opposed to Donald Trump, but perhaps "free trade" is not one of them.

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