Arrive Magazine - September/October, 2007

Better wages for all or a sacrifice of workers’ rights? The great NAF TA debate continues.

NAFTA Redux?

When Congress ratified the North American Free Trade Agreement (NAFTA) with Canada and Mexico in November 1993, it did so after a long national debate over the merits and costs of open markets. Worries about the treaty helped fuel the maverick third-party presidential candidacy of H. Ross Perot, who warned that the draw of cheap Mexican labor would lead to a “giant sucking sound of jobs being pulled out of this country.”

Nearly a decade and a half later, the debate over free trade continues. NAFTA’s defenders claim increased exports and rising wages in all three countries. Critics say that the treaty’s lack of environmental protections or guarantees of workers’ rights set a precedent for similarly lax deals with other countries, including China.

Comparisons between the new Framework to Advance Transatlantic Economic Integration and its famous predecessor are probably inevitable. While NAFTA’s main effect was to get rid of tariffs on everything from cars to farm produce, the transatlantic initiative deals with the more complex and technical area of regulation, which could limit its potential for controversy. But the agreement’s call for a single U.S.-EU market in financial services is far more ambitious than anything in NAFTA. Amid rising anxiety over globalization and the mysterious power of billionaire hedge-fund managers, that could be enough to rally serious political resistance.