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What The Media Tell Americans About Free Enterprise

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September 1997


Is NAFTA on the Fast Track?
Guest Editorial, by Robert Batterson

After years of delay, President Clinton has mounted an assault on Capitol Hill to restore his "fast-track" trade negotiating authority. Fast-track gives the president the power to negotiate trade deals quickly, unencumbered by congressional amendment. It makes trade agreements subject to a simple up-or-down vote. But the issue of whether or not Congress should give the president fast-track authority is once again being tied by reporters to the success or failure of NAFTA ó the North American Free Trade Agreement ó and they should know better.

Fast-track politics. Every president holding office since 1974 has had fast-track authority. In 1994, NAFTA, hailed as one of the administrationís defining bipartisan political victories, went into effect. That same year, Congress failed to renew fast-track authority. So whatís up?

In a word, politics. Politics on both sides of the aisle in Congress, and at 1600 Pennsylvania Avenue.

The Clinton administration once paraded NAFTA and pushed for the expansion of the treaty throughout the Western Hemisphere, calling for a Free Trade Area of the Americas by 2005. Chileís admission to the NAFTA club was seen as the next logical step to making this a reality. Yet the prosperous Latin American nation has been kept waiting, and waiting. Meanwhile, Chile negotiated bilateral trade agreements independently with Canada and Mexico, and became an associate member of Latin Americaís powerhouse trade bloc ó the Mercosur ó last October.

Likewise, the European Union and Japan have jealously eyed the markets of Latin America and have negotiated their own pacts with this rapidly expanding economic region ó second only to Asia in its rate of growth.

Now the president acts as if Congress has been tying his hands by its delay in restoring his fast-track trade authority. But it was the administration that dropped the free trade banner during the 1996 presidential campaign, cautiously courting labor unions and environmental interest groups. These groups want tough side agreements on foreign labor practices and environmental policies included in any fast-track deal.

Congress has been divided on this score, and continues to be. But it looks like President Clinton may concede and deliver a "clean bill" to Congress without the labor and environment restrictions. He wants to be remembered as a "free trade president" and he isnít running for office again. So will the president get fast-track? Not if the media insist that restoring it will lead to "another NAFTA." Why? Because NAFTA is a political hot potato.

Jobs, jobs, jobs. By most accounts, NAFTA has been good for our country. Yes, some 133,000 jobs reportedly were displaced as a result of the treaty, but about 311,000 jobs were created, for a net increase in U.S. employment of over 175,000 jobs. These arenít quite the numbers the administration had hoped for from NAFTA, but they certainly are in the plus column.

Increasing exports under NAFTA have also helped to spur economic growth. Despite Mexicoís economic problems, the United States still exported over $56 billion worth of goods there in 1996, an increase of about 23 percent over 1995. Exports to Canada topped $133 billion in 1996, for a 32 percent increase over the pre-NAFTA level.

But the unions donít see it that way. They say their high-wage jobs are being displaced by NAFTA and say theyíre ready to put their money to work in a media campaign to block fast-track. The unions refuse to face the facts of life in the new economy, a global economy. Itís incumbent on the media to acknowledge evidence that free trade benefits everyone.

Free trade is a consumer issue. Free trade, as advanced by NAFTA and any trade agreement that reduces or abolishes tariffs and quotas, benefits the consumer. Tariffs are a hidden tax, increasing the cost of everything we purchase. And letís not kid ourselves, almost everything we buy contains some component manufactured outside the U.S.

Before NAFTA, Mexican tariffs on U.S. exports averaged 250 percent more than U.S. tariffs on Mexican exports. Under NAFTA, the average Mexican tariff on U.S. products has already dropped by more than 50 percent, while the average U.S. tariff on Mexican exports has been cut by almost 60 percent.

A rising tide. International trade represents over 26 percent of the U.S. economy ó about triple the share in 1960. The booming global economy helps everyone ó including our trading partners ó which in turn develop the economic means to improve their own working and environmental conditions. Protectionist policies that skirt this simple truth are counter-productive.

Itís time for congressional Democrats and Republicans alike ó and the media ó to get this one right. Letís not mire whether the president should have his fast-track trade power restored with the political diatribe over NAFTA. Free trade works. Fast-track will give the president the authority he needs to do his job and make sure the U.S continues to lead the global economy.

Robert Batterson is communications director at the Center for the Study of American Business at Washington University in St. Louis and co-author and editor of The Dynamic American Firm (Kluwer Publishers, 1996).


ó Rich Noyes


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