A Boost for Trade Expansion
This article is excerpted from the book Outline of the U.S. Economy, published by the Bureau of International Information Programs.
The case for trade expansion received a major, if unexpected, boost in the 1990s from the administration of President Bill Clinton. Clinton's predecessor, George H.W. Bush, had made a North American Free Trade Agreement a centerpiece of his economic program, and it awaited congressional action as the 1992 presidential campaign arrived. Some of Clinton's advisers urged him to back NAFTA to demonstrate his credentials as a "new Democrat" - one who embraced trade and technology and was not beholden to the labor leaders who adamantly opposed the agreement. Others warned Clinton that supporting NAFTA could cost him precious electoral votes in a campaign that featured the independent candidacy of software billionaire H. Ross Perot, who predicted that NAFTA would send jobs flying to Mexico with a "giant sucking sound."
Stanley Greenberg, Clinton's pollster, argued that backing NAFTA might afford important political gains. Even though many voters were uneasy about the Mexican trade issue, they were not against trade itself, Greenberg said. Voters in "new economy" states such as California, he asserted, wanted an internationalist president. Clinton agreed, declaring he would seek to improve the agreement and then support its passage. He went on to defeat Bush in the 1992 election. Perot received 19 percent of the popular vote, a high-water mark for no-compromise opponents of trade expansion in a national election.
After becoming president, Clinton made congressional approval of the NAFTA agreement one of his administration's top priorities, gathering a coalition of Republicans and pro-trade Democrats in both the House of Representatives and the Senate to support it. An intense nationwide debate followed, with American labor unions warning that U.S. workers would lose jobs to Mexico, and with U.S. business leaders urging approval of the trade pact as a way of stimulating exports.
To win support from more Democrats, Clinton's negotiators pushed Mexico and Canada to accept two additions to the agreement designed to improve workers' rights and environmental protection in Mexico. These, it was thought, would help protect American labor by preventing Mexican producers from cutting their costs at the expense of labor and environmental standards. Congress approved the pact in 1993.
The debate about NAFTA's economic impact continues. During the 2008 Democratic presidential primary campaign in Ohio - a state that has lost 400,000 manufacturing jobs this decade - leading contenders Barack Obama and Hillary Clinton each said they favored amending NAFTA to make it fairer to workers. But they did not call for its repeal.
Following NAFTA's approval, the United States sought regional trade agreements with Central American nations and negotiated bilateral agreements with Israel, Jordan, Chile and Singapore. But opposition grew in the House of Representatives as imports cut more deeply into U.S. manufacturing employment. Earlier trade agreements had succeeded in Congress largely because they could be handled under special fast-track parliamentary rules that specified firm deadlines and forbade amendments. U.S. officials said the rules preventing major congressional amendments were essential since they locked in the terms reached by negotiators at the bargaining table. Congress could approve or reject the pacts, but not change them. However, a renewal of the fast-track authority in 2002 passed by just three votes in the House, and the authority was not renewed when it expired in 2007.
When President George W. Bush in 2008 sought congressional approval of a pending trade agreement with Colombia, House Speaker Nancy Pelosi, a Democrat, blocked it, asserting the House would first have to consider measures to deal with the U.S. economy's slowdown and to "address the economic insecurity of America's working families."
(This is a product of the Bureau of International Information Programs, U.S. Department of State.)