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PERSPECTIVE ON FREE TRADE : Protectionism in Social-Welfare Clothing

March 03, 1991|ROSEMARY PUGH PIPER | Rosemary Pugh Piper is a research fellow at the Hudson Institute in Indianapolis

Several members of Congress, led by Ohio Democrat Don J. Pease, are demanding that a free-trade agreement with Mexico be linked to the signing of a "social charter." The idea is to require, as a condition of freer trade with the United States, that the Mexican government adopt stiffer regulations concerning labor, health, consumer protection, the environment and electoral fraud.

Insisting on such linkage will kill any possible agreement with Mexico. Indeed, that is probably the real objective.

Mexico's laws governing social welfare are different from U.S. laws for a reason: wealth. The proponents of linkage are demanding that Mexico do the impossible and prematurely adopt social-welfare programs it cannot afford. In fact, they want to deny Mexico the one route--the building of a competitive, open economy--that would eventually give the country the resources to pay for extensive and expensive social standards--if, that is, the Mexican people chose to do so.

The linkage arguments are especially damaging because they revive a counterproductive and insulting style that so often has frustrated our bilateral dealings with Mexico. Once again, the United States is implying that it can and should micromanage Mexican affairs. Once again, the U.S. Congress is playing the role of paternalistic bully, insisting that the thinly disguised, self-serving agenda of its closet protectionists is really in the national interests of Mexico. After the Bush Administration has made promising headway in improving relations between the two countries, this approach only serves to fuel anti-American sentiment.

It would be unprecedented and dangerous for us to start linking open markets to "correct" social policies. How would we respond if Canada, for instance, demanded that we institute national health care to serve the millions of Americans who go without?

If Europe's experience with economic integration teaches us anything, it is the importance of maintaining the utmost respect for national sovereignty. Were the European Community to require uniform social programs, the 1992 project would have aborted long ago, and countries like Spain and Portugal would have been denied the miracle that has brought them phenomenal economic growth.

The arguments against linking free trade to social and political reform are so obvious and powerful, they reveal the true motivation behind the Congress members who make them: protection for special interests.

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