United States trade representative Mickey Kantor's cautious approach to the North American Free Trade Agreement (NAFTA) in last week's negotiations laid to rest persistent rumors that he was the bastard offspring of Smoot and Hawley.
In spite of the Clinton administration's earlier protectionist feints, the exploratory talks show hints that with the right (read Clinton-supported) negotiating strategies the pact may yet be ratified as initially constructed. The weighty appendages of the three supplemental agreements designed primarily to placate opposing labor, industry and environmental groups have not undermined the act's fundamental intent.
If ratified by Congress, NAFTA would eliminate virtually all import-export barriers among the United States, Canada and Mexico over the next fifteen years. The fact that the 360 million consumers in this free trade area would automatically benefit from lowered prices should be a major impetus for the treaty's ratification.
But widespread optimism among the signatories has been eroded by the attacks on NAFTA made recently by special interest groups in the U.S. Fearing widespread unemployment and continued environmental violations by Mexico, formidable labor, industry and environmental groups are using their political clout to impede the progress of the negotiations.
A plan proposed by Montana Senator Max Baucus calls for the establishment of trilateral commissions with the ability to investigate complaints of environmental transgressions and to levy across the board trade sanctions if systematic, persistent violations are found.
This should appease environmental groups such as the Sierra Club and The National Wildlife Federation who have been clamoring for the inclusion of substantive enforcement mechanisms in the agreement.
(Fortunately, the Clinton administration, realizing the folly of attempting to impose U.S. domestic law on sovereign nations would deny subpoena powers to the board.)
Michael Fischer, the former executive director of the Sierra Club, has said that there must be "measurable, quantifiable environmental values consistent across boards, even while we acknowledge a nation's sovereignty."
But paradoxically, environmentalist concerns too often ignore the reality that beleaguered economics are simply unable to set in place the necessary apparatus for strict enforcement procedures. Mexicans are not necessarily less concerned about the environment than their northern counterparts, just hampered by economic constraints.
NAFTA and its promise of economic benefits will go a long way in enabling the implementation of stricter scrutiny and more stringent environmental laws. The apocalyptic nightmare of a devastated landscape and the continent-wide lowering of environmental standards presented by the more radical environmentalist factions may make for good theater, but that vision is patently false and unnecessarily alarmist.
Jagdish Bhagwati, professor of economics at Columbia University, warned in Friday's Wall Street Journal that "if a nation's trading rights can be suspended simply because it refuses to accept another nation's idiosyncratic values, everyone could insist on morality-driven trade restrictions and the whole international trade system would head down a slippery slope." He also sagely urged us to examine whether "environmental regulations are really protectionism in disguise."
U.S. labor groups who fear the flight of manufacturing jobs to Mexico are understandably disconcerted at the prospect of further unemployment. Indeed the number of jobs projected as being lost approach a quarter of a million. The gains in American auto parts, computers and industrial machinery, however, should more than offset losses in other sectors. It will be a difficult adjustment for the affected sectors, but this should be a particularly opportune time for the administration to implement a strategy for upgrading factors of production. Surely a palatable political solution can be reached.
Opponents of NAFTA argue that Mexico is not democratically progressive and that it lacks the democratic progressive and that it lacks the democratic and legal structures necessary for democracy. This ignores the fact that an economically thriving Mexico which has joined the ranks of the developed countries would be better situated to facilitate a more rigorous implementation of democratic structures.
For example, Mexico has already ratified the American Convention on Human Rights, which provides for the observance of basic human rights throughout the hemisphere, a clear indication of its willingness to make advances on this front.
Clearly, Mexico's political system needs fundamental reforms, but progress is being made precisely because of the increased attention being paid to the country. Dissidents no longer encounter mysterious deaths; indeed, they are actually gaining footholds in the system and their political access is increasing. Substantive political reform is usually impossible without economic development; the symbiosis between the two is incontestable.