Friday, May 08, 2015

Fool me once: NAFTA … Fool me twice: TPP

America is about to make a horrible mistake all over again

In the '90s, NAFTA was full of grand promises that never came true. Now we're hearing those same promises again


Back in the early ’90s, a debate was raging over whether to pass the enormous North Atlantic Free Trade Agreement. Al Gore debated Ross Perot on “Larry King Live,” while President Clinton had former Presidents George H.W. Bush, Jimmy Carter and Gerald Ford all join together to praise the deal and earn the public’s trust. Throughout all of the media escapades, a lot of promises were made. On the signing of NAFTA, President Clinton said that the deal would create an economic order in the world that would “promote more growth, more equality, better preservation of the environment and a greater possibility of world peace.” Specific promises were also made — Clinton said that the deal would “create 200,000 jobs [in the U.S.] by 1995,” specifically “by fostering an export boom to Mexico.”

NAFTA was not a typical trade deal. There was much more to it than just cutting tariffs and quotas. This deal was more about expanding corporate privileges and safeguarding foreign investments, which in a sense makes it less about free trade, and more about hooking up big business with the ultimate corporate welfare package. NAFTA included the infamous Investor-State Dispute Settlement (ISDS) provision, extended patent rights for medicine, and limited regulation for certain industries.

The promises were great, but like so many political promises, they were just plain wrong. While an export boom to Mexico was predicted, the opposite happened. In 1993, one year before NAFTA was implemented, the United States had a trade surplus with Mexico of $2.5 billion (inflation-adjusted) and a $29.1 billion deficit with Canada. In 2012, after more than a decade and a half, the combined U.S. deficit had grown to $181 billion. Indeed, NAFTA ended up creating an import boom from Mexico, rather than an export boom to it.

(Continued here.)


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