Cancel NAFTA? American lawmakers look to rip up trade deal
Forget about the trouble Canada had with the Buy America policy, there is a new game in Washington; it's called Block Canada. A group of congressmen have given their backing to a bill that if passed, would see President Barack Obama give six-months notice that the United States was withdrawing from the North American Free Trade Agreement.
Representative Gene Taylor, a Democrat from Mississippi, introduced the bill last Thursday and quickly found the support of 27 cosponsors in both the Democratic and Republican parties. The bill has attracted support from moderates and the fringe in both parties as well, with several members of the Blue Dog Coalition of moderate Democrats signing on alongside libertarians like Ron Paul on the Republican side or Dennis Kucinich of the Democratic left. The bill also has fairly wide spread geographical support with representatives from 16 different states.
With more the $1 billion per day in cross border trade between Canada and the United States, politicians in Ottawa need to be concerned about any threat that would limit access to the U.S. market. The recent Buy America provisions of the Recovery Act of 2009 were credited with the loss of thousands of jobs and millions of dollars in lost business for Canadian companies.
The Canadian impact of cancelling NAFTA is likely to have little sway with the sponsors of this bill, their concern is the health of the U.S. economy. Rep. Taylor is quoted by Reuters as saying, "At a time when 10 to 12 percent of the American people are unemployed, I think Congress has an obligation to put people back to work."
While supporters have long credited NAFTA with helping boost trade and create jobs, opponents like cosponsor Bart Stupak, a Michigan Democrat, say the trade treaty has cost American jobs, "I remain opposed to NAFTA because it continues to hurt the U.S. economy and put Americans out of work. I am pleased to join my colleagues to propose a repeal of this failed trade policy. NAFTA has failed to deliver the benefits that were promised and has cost Michigan hundreds of thousands of good manufacturing jobs."
Stupak relies on data from the Economic Policy Institute which claims Michigan in particular lost 63,000 jobs as a result of NAFTA while the United States as a whole lost 1 million jobs as a result of NAFTA.
President Obama has promised to support freer trade and NAFTA in particular since coming to office, yet he was known for critiquing the pact while campaigning to be president. During a speech two years ago in Ohio, then candidate Obama was critical of rival Hillary Clinton and her support for NAFTA saying the United States can't keep passing unfair trade deals. "One million jobs have been lost because of NAFTA" Obama told his audience, "including nearly 50,000 jobs here in Ohio. And yet, ten years after NAFTA passed, Senator Clinton said it was good for America. Well, I don't think NAFTA has been good for America - and I never have."
Expect Canadian politicians to downplay this threat but there are plenty of reasons to worry, the first among them, President Obama's past statements and long history of opposition to NAFTA. This is also an election year in the United States with the entire House of Representatives and 36 Senate seats up for grabs. With unemployment still running high in the United States, offering populist solutions like closing the borders could strike a chord with an agitated public. Finally, don't expect this anti-NAFTA push to just come from the Democrats, not only has Taylor's bill picked up support from Republicans but the growing Tea Party movement in the United States, which leans right, is attracting plenty of anti-trade supporters who say it is time to put America first.
Brian Lilley is the Ottawa Bureau Chief for Newstalk 1010 in Toronto and CJAD 800 in Montreal. Follow Brian on Twitter to get the latest as it happens.
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