‘America First’ may not need Trump
The North American Free Trade Agreement is back on the front burner of American politics. It has survived its U.S. critics before. Can it survive Donald Trump?
A few months ago, this would have been a question of little interest. A few months ago, Trump’s candidacy for the Republican presidential nomination was dismissed as the fantasy of a billionaire buffoon.
Now thanks to the voters of Indiana, who overwhelmingly chose Trump in that state’s Republican primary Tuesday, the fantasy is coming true. The buffoon is almost sure to face Democratic nominee Hillary Clinton in November’s presidential election.
And he has his sights set on NAFTA.
Over the course of his campaign, Trump has been consistent in his critique of the investment, regulatory and trade pact linking Canada, Mexico and the U.S.
Last September, on prime time television, he proclaimed it a “disaster.” On Tuesday, he said NAFTA was “perhaps, in the history of the world, the worst trade deal ever.”
Last week, in a major foreign policy speech, he blamed NAFTA for killing America’s manufacturing sector and destroying good jobs.
He has said he will either break the agreement or force Canada and Mexico to renegotiate it.
Now it is true that what Trump thinks about NAFTA may not matter. The New York real estate developer lags Clinton in the polls by about eight percentage points. With his macho bombast and his call for a wall between the U.S. and Mexico, he risks alienating women and Hispanics. He could easily lose in November.
More to the point, he may simply be fibbing. He may be portraying himself as anti-free trade in order to get votes.
There is a long history of this in politics. Barack Obama, for instance, campaigned in 2008 on a promise to renegotiate NAFTA. As president, however, he never followed through.
Clinton’s stated opposition to the proposed Trans-Pacific Partnership trade and investment pact is probably equally flexible.
Yet at the same time, something is going on with free trade in the U.S. Even some of the most ardent intellectual proponents of such deals now admit that free trade on its own is no economic panacea.
Most important, there is a growing recognition that benefits from free trade are shared unequally.
Everyone may gain by being able to buy, say, cheap foreign toasters. But the people who used to make those toasters lose far more than they win.
Using data from the Bureau of Labor Statistics, FactCheck.org reports that the number of manufacturing jobs in the U.S. has fallen by 27 per cent since NAFTA was introduced in 1994.
The number of jobs overall has risen by 28 per cent over the same period. But are these new jobs as good as the ones lost?
Clearly, the rust-belt workers who voted for Trump in Indiana don’t think so.
All of this is important to Canada because this nation’s economy is centred on NAFTA. Canada has already gone though the wrenching transition from a protected economy, where most things purchased here were made here, to one built around a continentwide supply chain.
For those in the auto industry, NAFTA may be worse than the old Canada-U.S. auto pact that it replaced. But if NAFTA goes, the old auto pact is not necessarily going to be resuscitated.
When Trump talks of slapping a 35-per-cent tariff on cars made outside the U.S., he’s not just talking about Mexico.
Even if Trump doesn’t become president, some of his ideas may thrive.
Critics may sneer at his decision to use the slogan “America First.” It is indeed the same slogan used before the Second World War by those who wanted to keep the U.S. out of the fight against Hitler.
But I suspect it is a slogan that a lot of Americans today would agree with, particularly when applied to trade deals.
Canadians will want to watch this carefully as it plays out. No Canadian government of any stripe would have the nerve to either repeal NAFTA or demand a wholesale rewrite of the deal.
But the Americans might. Thomas Walkom’s column appears Wednesday, Thursday and Sunday.