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.)
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