It has been a dispiriting spectacle for anyone who thinks that Congress can weigh evidence and reach considered conclusions. For example, none of the economic studies–most of which find that NAFTA would initially create U.S. jobs–shows huge employment effects. The possibility that NAFTA might cause job gains or losses of a few hundred thousand over five years or so (the studies vary) looks underwhelming when you recall that, during the past year alone, the economy generated 2.2 million new jobs.
But the NAFTA debate no longer concerns jobs or even facts. it is about power and ambition. Reputations ride on the outcome–the president’s, Ross Perot’s, organized labor’s, Richard Gephardt’s. The phrase-makers like Perot and Buchanan have imbued NAFTA with a larger meaning, and because the stakes are so high, they do not feel bound by some semblance of the truth. Instead, they have created their own rhetorical truths. Buchanan even admits NAFTA might benefit America economically–but still opposes it.
“Even if NAFTA brings an uptick in GNP, it is no good for America,” he writes in The Washington Post. “[We] don’t want to merge our economy with Mexico, and we don’t want to merge our country with Mexico…That’s not what America is all about.”
This has a nice self-righteous ring, and I am waiting eagerly for Buchanan to move Mexico to the South Pole where it will no longer bother us. Meanwhile, Mexico sits across the Rio Grande, and our economies are already interconnected. In 1992, our exports to Mexico totaled $41 billion; Mexico’s exports to us were $35 billion. Perhaps 200,000 to 300,000 Mexicans immigrate north, legally and illegally, every year; at least 1.5 million cross for temporary jobs. Until Buchanan changes our geography–or convinces Congress to erect an iron curtain along our 2,100-mile border–the commerce and comingling will continue.
“America First” is also a seductive phrase, but of course, U.S. foreign and economic policies always try to put American interests first. What Buchanan, Perot and the unions (which rabidly oppose NAFTA) are peddling is a narrow-minded nationalism that excludes any concept of enlightened self-interest.
Just because our policies may benefit other countries doesn’t mean they are bad for us. The case for NAFTA is that it will gradually foster a prosperous Mexico, which would be better for us than a poor Mexico. NAFTA would do this, in theory, not by opening two markets that are totally closed to each other but by committing Mexico to liberal economic policies that would reassure private investors. Heavy investment in Mexico would then raise its economic growth and living standards–and incidentally the demand for our exports. The ultimate goals are healthy two-way trade, stronger economies in both countries and a Mexico that can afford to clean up its environment.
No one can say whether NAFTA would achieve its ambitions, but the opponents haven’t offered anything better. Moreover, the odds are that NAFTA’s defeat would immediately have bad consequences. Consider two possibilities:
NAFTA’s defeat might undermine investors’ confidence, and their withdrawal of funds could lower the peso’s value. This could increase Mexico’s exports by making them cheaper. We glimpsed this possibility last week when speculation about a NAFTA defeat temporarily pushed the peso down nearly 5 percent. Perversely, NAFTA’s demise might bring the results NAFTA opponents want to avoid.
This might happen anyway, but NAFTA’s defeat would make it more likely. The Clinton administration would make fewer concessions to foreigners for fear that Congress would reject a GATT agreement–and foreigners would make fewer concessions to us for the same reason. NAFTA opponents might cheer. But GATT’s downfall could cut global economic growth and our own. Uncertainty about trade rules could suffocate the quest for new markets that drives economic expansion.
The larger agenda of the NAFTA opposition is to advance avowedly protectionist and isolationist policies. Perot proposes new duties against Mexican products that he calls a “social tariff.” Buchanan says that NAFTA’s defeat would end “the free trade myth” and that then “all things are possible.”
What Perot et al. don’t say is that trying to reverse our economy’s growing global connections would be futile and probably selfdestructive. Doing that would require uninventing the jet plane, shooting down communications satellites and outlawing multinational companies. These are the forces that have made business more worldly. NAFTA’s defeat would surely lead to more protectionist proposals, which would inspire similar measures abroad. The effect would be to penalize our most dynamic industries and protect our least productive.
The last time an “America First” movement flourished was the 1930s. In a new book about World War II, historian William O’Neill recounts how the 1930s’ isolationism contributed to the onset of the war and left America unprepared to fight. The essence of the isolationist illusion, then as now, is the denial of reality. The rhetoric is populist and patriotic, but the ideas are nutty. If Congress endorses them, it will be a low day for democracy.
