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A Bill to Kill NAFTA: -- American Job Losses Spur Protectionist Legislation
Fresh off decisions that violate the spirit, if not the letter, of the NAFTA, as in the Mexican Trucks measure, (see previous Trade Matters article) and the "Buy American" provisions of the Stimulus Bill, the Obama Administration and the Congress seem poised to go one long step farther toward the union-backed protectionist dream of killing the NAFTA.
On March 4, 2010 a group of 27 House members composed of 24 Democrats and 3 Republicans (one of the latter group being Rep. Ron Paul,) introduced a bill that would require President Obama to withdraw the U.S. from NAFTA within six months.
Supported by Obama's three predecessors in office, the NAFTA, initiated in 1993, has been the subject of much criticism, especially of late, despite the enormous growth in trade between the U.S. and Canada and Mexico. According to the Heritage Foundation's Jim Roberts, that trade tripled to nearly $1 trillion, and it accounts for more than 100,000 small and medium-sized U.S. firms employing Americans to produce goods and services for export to those countries. (See The Foundry, "NAFTA Should Not Take the Fall for Mexico's Failure to Reform," by Jim Roberts, posted 2-3-2010.)
Proponents of the new bill, such as Rep. Gene Taylor, (D-Miss.), say that the NAFTA has led to a decline in jobs and the U.S. industrial manufacturing base. Taylor is reported as saying that withdrawing from NAFTA would help keep jobs in the U.S. and reduce unemployment. Another supporter of the kill NAFTA Bill, Teamsters' President, James Hoffa, claims that: "We were sold a bill of goods about NAFTA." (See Journal of Commerce article by William B. Cassidy, "Bill Introduced to Kill NAFTA," Mar. 4, 2010.)
The Canadian press reports that Canadian cabinet ministers express confidence that the new measure won't succeed. (See CBC News online, "NAFTA pullout bill fails to scare Ottawa," March 9, 2010.) They point out that Canada recently avoided a trade dispute after working out a deal over the "Buy American" provisions in the Stimulus Bill.
But given the difficult domestic situation, with millions of U.S. jobs lost, the "Stimulus" not stimulating job recovery, upcoming elections, and Obama's penchant to cave in to union desires, the Kill NAFTA bill and other protectionist measures could in fact threaten the life of this successful treaty.
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