The Public Policy / Knifing NAFTA
Breger, Marshall
Although President Clinton is on record as supporting the North American Free Trade Agreement, his budget director Leon Panetta has declared NAFTA "dead—for now." The pact is about a hundred votes...
...As this issue goes to press, the White House is rife with rumors that Bill Daley (brother of Chicago mayor Richard Daley, Jr...
...Its eco-nomi United States will continue to advance even if NAFTA should stall...
...But the labor unions alone cannot defeat NAFTA...
...Then Kantor backed off once again—and proposed monitoring and consultation in the event of surges...
...President Salinas has tied his political fortunes to the NAFTA mast...
...trade representative Mickey Kantor to a televised debate...
...Other versions would create a North American Development Bank modeled on the European Bank for Reconstruction and Development, set up to assist former East Bloc countries...
...Richey's heavy-handed intervention will be reviewed by the Court of Appeals on August 24, but if the decision is not overturned, the months that will be required for the EIS studies could put the final nail in the NAFTA coffin...
...for allowing "striker replacement...
...This will be a recycled version of Clinton's stimulus package or—dare one say it—the antipoverty grants of yore...
...Even Laurence Tribe said that Richey's decision "blows my mind...
...will be appointed "NAFTA czar," supreme commander of the mother of all free-trade battles...
...A revved-up trilateral labor commission could, for example, urge Mexico to adopt a 40-hour week and condemn the U.S...
...business plenty...
...After all, the president has little political capital left to spend, and may husband it for a cause nearer and dearer to Hillary's heart...
...As this issue goes to press, the White House is rife with rumors that Bill Daley (brother of Chicago mayor Richard Daley, Jr...
...Other suggestions before the Clinton National Economic Council include the creation of a "NAFTA Environmental Trust" within the International Development Bank, with $250 million in start-up capital and $9.75 billion in "callable" capital backed by the NAFTA countries...
...Big Labor's problem is that, it cannot be certain that they will be union jobs...
...First, H. Ross Perot Thas thrown down the gauntlet, spending more than $5 million for a 30-minute infomercial raising the specter of a "giant sucking sound" of high-wage American jobs rushing southward to Mexico's low-wage environment...
...Yet one wonders if Clinton's heart is in it...
...Thus Kantor conjured up sanctions language, figuring that he could sell it to free-traders (as well as Canada and Mexico) by pointing out that they were window-dressing only...
...And they want the Commission to be run U.N.-style--by an independent secretariat...
...President Salinas has tied his political fortunes to the NAFTA mast...
...It's the marginal supporters who may well decide that the final Clinton package is not the free trade agreement they originally supported and head for the tall grass...
...Last May, at least seven environmental groups, including the National Resources Defense Fund and the National Wildlife Federation, announced they would support NAFTA—but at a price...
...It's the marginal supporters who may well decide that the final Clinton package is not the free trade agreement they originally supported and head for the tall grass...
...How would the Commission be structured and what would be its powers...
...It is not only the economic but the political effects that should concern us...
...Other recommendations in the U.S...
...will instead propose some form of fines to be assessed and collected by individual governments...
...AFTA or no, Mexico is moving out of the Third World...
...At the end of the day, NAFTA may yet limp past the finish line...
...Ever sensitive to intrusions on their sovereignty, Canada demurred and Mexico exploded...
...Ultimately, however, if Mexico holds fast, free-trading congressmen and business groups will likely prefer half-aNAFTA to none at all...
...Some insiders now believe that the U.S...
...Mexico will do what it must to get NAFTA, and Canada's NAFTA Implementation Act passed its senate in June, leaving the ball in Clinton's court...
...He has challenged U.S...
...While his party, the PRI, will survive the 1994 Mexican elections, Salinas's ability to nominate a successor in his own image will be crippled without a free-trade boost...
...This backing and filling has brought NAFTA supporters to the edge of despair...
...Ironically, the fate of NAFTA now depends on Clinton's political will, and by waiting for the "side agreements" to be concluded before beginning its "sales campaign," the administration has let the NAFTA skeptics set the agenda...
...Arizona Congressman Jim Kolbe and other Republican free-traders have warned that they may jump ship if the supplemental agreements savage the basic text...
...But Clinton's political calculations have made these endgame negotiations considerably more difficult...
...nder the guise of fighting to U improve Mexican labor and environmental laws, the anti-NAFTA forces are pursuing a domestic agenda...
...However exaggerated the merits of the agreement he reached with the Japanese at the G-7 summit in July, he did trumpet it as a free-trade triumph...
...Mexico will do what it must to get NAFTA, and Canada's NAFTA Implementation Act passed its senate in June, leaving the ball in Clinton's court...
...proposal—including a party-initiated complaint process, data collection, and public hearings—should worry U.S...
...AFTA or no, Mexico is moving out of the Third World...
...The courts, too, have got into the act...
...Instead of touting the economic virtues of free trade, his rhetoric increasingly reflects the social-engineering enthusiasms of the NAFTA opponents...
...He has met with the House freshman class and threatened them with voter retribution if they support the treaty...
...Yet one wonders if Clinton's heart is in it...
...Political logic suggests that Clinton will engage after the signing (sometime this summer) of supplemental agreements that Clinton can sell as a "social charter" won for labor and green interests...
...David Gergen, ever obsessed with "focus," may decide Clinton should bump free trade for health care as the project of the season...
...In congressional hearings, Kantor suggested that this country "manage" market forces by a supplemental agreement to limit "import surges...
...Mickey Kantor's approach to NAFTA negotiations typifies the Clinton team's confusion...
...Labor and green groups hoped to convert the Commission into a vehicle to enforce child labor and pollution standards throughout North America...
...responded sympathetically to the Mexican view that trade sanctions imposed by a trilateral commission violate national sovereignty...
...While his party, the PRI, will survive the 1994 Mexican elections, Salinas's ability to nominate a successor in his own image will be crippled without a free-trade boost...
...During the presidential campaign, Clinton tried to have it both ways, coming out for NAFTA while stipulating that the concerns of labor and environmental groups must be met...
...In its May negotiating draft the U.S...
...Early on, Xerox's Paul Allaire (Bill Clinton's favorite CEO) proposed a 2.5 percent "training tax" on U.S.-Mexico trade to pay for worker dislocation...
...Yet liberal policy-makers still hope to accompany the treaty with all sorts of transaction taxes to support "border clean-up," "infrastructure improvement," etc...
...This rhetorical flourish opened up possibilities for social engineering previously unimagined...
...First these people aimed their efforts at mollifying anti-NAFTA House Majority Leader Richard Gephardt and the greens, assuming that Big Labor would never sign on and that Republicans and business don't count in the calculus...
...More recently, green groups have made creation of a massive "environmental assistance fund"—that is, a public slush fund for the use of environmental groups—a necessary condition for their support, however lukewarm...
...It is not only the economic but the political effects that should concern us...
...will be appointed "NAFTA czar," supreme commander of the mother of all free-trade battles...
...Ironically, the fate of NAFTA now depends on Clinton's political will, and by waiting for the "side agreements" to be concluded before beginning its "sales campaign," the administration has let the NAFTA skeptics set the agenda...
...The pact is about a hundred votes shy of passage in the House of Representatives, where members await guidance from constituents and the freshman class remains acutely sensitive to the wrath of Ross Perot and other anti-NAFTA forces...
...The AFL-CIO, meanwhile, views a North American Labor Commission as the first step toward creating labor standards analogous to the European Community's "social charter...
...They want NAFTA dispute-resolution panels to arbitrate environmental complaints and impose "pre-NAFTA tariffs" on environmentally incorrect goods...
...According to the Mexican newspaper El Financiero Internacional, Herminio Blanco, Mexico's chief NAFTA negotiator, walked away from the negotiating table...
...Why, then, does NAFTA teeter on the brink...
...It is difficult to see how Clinton can walk away from NAFTA without suffering serious political defeat (and giving Ross Perot a scalp to wave...
...At first,' some NAFTA skeptics proposed a "kibitzing commission" that would hold hearings and issue reports...
...Ultimately, however, if Mexico holds fast, free-trading congressmen and business groups will likely prefer half-aNAFTA to none at all...
...At the end of the day, NAFTA may yet limp past the finish line...
...Put simply, such a clause would require that if free trade starts to work too well, he will call a halt to it in the affected industry...
...Gephardt's price was some kind of sanctions...
...Such standards would help American labor unions achieve "co-determination" status on the German model—which gives unions a formal role in national labor policy and corporate decision-making...
...wo reasons...
...Still others favored a tripartite body where "business and environmentalists can sit at the same table as partners with government officials...
...It is difficult to see how Clinton can walk away from NAFTA without suffering serious political defeat (and giving Ross Perot a scalp to wave...
...In a meeting July 9-11 in Mexico City, the U.S...
...Political logic suggests that Clinton will engage after the signing (sometime this summer) of supplemental agreements that Clinton can sell as a "social charter" won for labor and green interests...
...Clinton continues to talk the rhetoric of free trade...
...He proposed a trinational North American Commission on Labor Standards with "independent expert staffs and the authority to review complaints from citizens and nongovernmental organizations...
...Clinton continues to talk the rhetoric of free trade...
...Consider the public relations impact of an international organization issuing a report condemning the labor practices or the pollution in a particular industrial plant...
...However exaggerated the merits of the agreement he reached with the Japanese at the G-7 summit in July, he did trumpet it as a free-trade triumph...
...In a ruling on a suit filed by three anti-NAFTA environmental and consumer-action groups (Public Citizen, the Sierra Club, and Friends of the Earth), Federal District Court Judge Charles Richey ordered the government in late June to prepare an Environmental Impact Statement on NAFTA...
...In an October 4 campaign address at North Carolina State University, Clinton committed himself to graft social and environmental understandings onto what was previously understood to be solely a free-trade agreement...
...And even liberal governors like Ann Richards of Texas and Jim Hunt of North Carolina have signed on...
...As to trade sanctions, Kantor, after running up the flag, may again be backing off...
...Second, with a raft of intense anti-NAFTA constituencies, only vigorous presidential leadership can mobilize a national constituency in favor of free trade, and Clinton has been an irresolute defender of free trade...
...The only play, therefore, was in the supplemental agreements designed to accompany the treaty to Congress...
...Elite opinion generally supports free trade...
...Its eco-nomi United States will continue to advance even if NAFTA should stall...
...This ploy, which the AFL-CIO tries continuously at ILO meetings in Geneva, may now become standard fare here at home...
...David Gergen, ever obsessed with "focus," may decide Clinton should bump free trade for health care as the project of the season...
...The AFL-CIO, frustrated by the flight of manufacturing jobs, has been a long-time opponent of NAFTA, even though estimates are that the free-trade agreement will create at least 170,000 jobs over the next five years...
...text...
...The whole point of NAFTA was to eliminate tariff barriers to facilitate .trade on both sides of the border...
...The principal negotiators and their deputies continued to meet through June and July to bridge the gap over trade sanctions and determine whether to create an independent (i.e., politically unaccountable) trilateral secretariat...
...But by the time Clinton took office the 2,000 plus–page treaty signed December 17 was fixed, and none of the countries involved—Canada, the U.S., and Mexico—was about to reopen the official text...
...After all, the president has little political capital left to spend, and may husband it for a cause nearer and dearer to Hillary's heart...
...adopted many of the Green/Labor notions, recommending an Independent Commission Secretariat (a new international civil service with its own agenda) and the use of trade sanctions to ensure compliance with accords...
Vol. 26 • September 1993 • No. 9
