U.S. President Donald Trump campaigned (and is now attempting to govern) on the premise that NAFTA was “the worst deal ever.” Economists say it wasn’t. Workers say it was. Both are answering the wrong question.
The structure of the NAFTA debate has always been a trap. In the political hothouse of the early 1990s, as the agreement was negotiated under Republican President George Bush and then signed under Democratic President Bill Clinton, observers seemed to want an easy “yes” or “no” answer to whether the bill was going to end (or save) the world. There was no patience for the kind of winding replies that I would give, such as “it’s really about figuring out the high road toward good wages and strong, sustainable growth.”
During the original NAFTA debate, it was easy to mock the silliness of “NAFTA Math,” as Carl Levin, then Democratic Senator from Michigan, called it. Or, in a reference to Secretary of DefenseRobert McNamara’s blindly mathematical pursuit of the Vietnam War, the “the jobs body count” logic of the debate. Hundreds of thousands of jobs created or hundreds of thousands destroyed? Booming employment in a new economy or burnt-out wasteland of postindustrial despair? Giant sucking sound or brave new world? Answer: none of the above.
The story remains the same 25 years after NAFTA was negotiated: the economic impact of the trade deal is far more ambiguous and significantly less interesting than its political impact. Indeed, it is less a trade deal than an icon to be smashed or revered.
For that reason, it shouldn’t be surprising that many workers in the heartland remain palpably bitter about NAFTA a generation after the deal went down. To them, it was a political betrayal—especially by the Democrats who were supposed to stand up for working people but instead sold the country out and turned the heartland into a wasteland.
But all was not well in the heartland even before the deal. The trade agreement certainly has its problems, but its role in policy history was mostly to codify an existing order—to place the official seal on a trade regime that had been in place for more than a generation. Most of this system would have continued without a formal deal.
The current discussion about NAFTA overlooks, for example, the silent capital integration that took place before the noisy version. American factories popped up like mushrooms across the border from the late 1960s through the 1980s. When reporters showed Since NAFTA never was and is not now the problem, we need a new debate.
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