The fate of the North American Free Trade Agreement rests with House Republicans. The agreement appears safe in the Senate. But in the House, where at least three out of five Democrats are opposed, the support of two out of three Republicans is needed to assure passage. And right now there aren't enough.
The opposition of left-wing Democrats to free trade is principled--mistaken, but principled. Congressional Republicans who vote against NAFTA are purely opportunistic. How many speeches have these politicians given about the virtues of free-market capitalism, the iniquity of taxation, the importance of getting the government off people's backs? Yet here is a proposal to eliminate tariffs and quotas and let Americans buy and sell what they wish, which these Republicans oppose.
Why any politician abandons his or her alleged principles is not a mystery worth dwelling on for long. In the case of Republican NAFTA opponents, one explanation is fear of being caught on the wrong side of Ross Perot's demagoguery. An even less admirable explanation is the wish to hand Bill Clinton a defeat, no matter what the subject. NAFTA was negotiated by the Bush Administration. It is inconceivable that dozens of Republicans in Congress would be voting against it if George Bush had been reelected.
The politics of trade are a paradigm of America's general political dilemma. They illustrate why "change," though we all claim to want it, is so hard to come by. There is no doubt that free trade is a net benefit for the country as a whole. But there is also no doubt that it hurts certain individuals. Unfortunately, the benefits are spread among the general population and often hard to identify specifically, while the harm is concentrated on a few identifiable--and politically organized--interests.
The person who will get a job because of NAFTA isn't even aware of it yet; the person who may lose a job because of NAFTA is all too aware. The millions who will enjoy cheaper food and clothing thanks to NAFTA aren't lobbying for it; but the farming and textile interests that will face new competition are lobbying against it.
NAFTA will benefit Americans in two ways. Yes, it will create jobs--more jobs than it eliminates--by building a bigger market in Mexico for American products. But giving Americans access to cheaper Mexican products is also a plus, not a minus. The debate over how low Mexican wages really are misses the point. The lower they are, the better deal this is for America. In importing Mexican products, we are, after all, buying Mexican labor. The less we pay, the bigger the bargain. And opponents of NAFTA should spare us their crocodile tears for the Mexicans who take these low-wage jobs, since the alternative is even lower wages--or unemployment.
The people of the United States cannot grow richer by paying ourselves $16 an hour for work that foreigners are willing to do for us for just $3. Attempting this trick is to abandon economics for alchemy. But when a $16-an-hour American loses his job to a $3-an-hour Mexican--and it will happen under NAFTA, though not nearly as often as opponents charge--it's only fair that some of society's savings be used to cushion the blow for that person, and retrain him or her for work that's actually worth $16 an hour.
The Congressional Budget Office estimates that NAFTA will increase the U.S. gross domestic product by a measly quarter of 1%. But even that is nothing to sneeze at--$15 billion or $20 billion a year. Spending some of that money on NAFTA's losers seems only fair. And if it greased the wheels of the deal by changing the minds of a few opponents, it would enable everybody to come out ahead.
But here we come to a second way the politics of NAFTA are paradigmatic of America's larger political problem. In today's reflexively anti-government climate, it is nearly unthinkable to propose spending, say, $5 billion a year on compensation and retraining for victims of NAFTA, even if this would enable the country as a whole to gain the $15-billion benefits of the agreement (and leaving aside the value to society of the retraining itself). Labor Secretary Robert Reich has proposed merging all of the government's worker retraining schemes into one program, budgeted at $1.1 billion, with a pie-in-the-sky goal of $3.3 billion in 1998. And he's a big-spending liberal.
So Republicans owe NAFTA more than just a yes vote. They owe it a willingness to rethink their reflexive opposition to government programs to help the folks injured by capitalism's "perennial gale of creative destruction," of which NAFTA is a part.
But for now, a yes vote will do.