![]() |
|
Wednesday, February 27, 2008
previous entry | main | next entry | TrackBack (0)
NAFTA is not responsible for Ohio
Perhaps an unanticipated benefit of Clinton and Obama outbidding each other to see who could savage NAFTA more is that the mainstream media will actually point out that NAFTA is not responsible for the rust belt's economic woes. David Leonhardt makes this point in his New York Times column today: The first problem with what the candidates have been saying is that Ohio’s troubles haven’t really been caused by trade agreements. When Nafta took effect on Jan. 1, 1994, Ohio had 990,000 manufacturing jobs. Two years later, it had 1.03 million. The number remained above one million for the rest of the 1990s, before plummeting in this decade to just 775,000 today.Leonhardt also raises an obvious point that has, curiously, not been aired all that often: [W]hen you read [Clinton's] plan, or Mr. Obama’s trade agenda, you discover none of it is particularly radical. Neither candidate calls for a repeal of Nafta, or anything close to it. Both instead want to tinker with the bureaucratic innards of the agreement. They want stronger “labor and environmental standards” and better “enforcement mechanisms.”Repeat after me: attaching labor and environmental standards to trade agreements will have no appreciable effect on trade flows. Anyone who tells you differently is selling you something. UPDATE: Simon Lester does make a valid point: "Demanding that labor and environmental provisions be included could scuttle some trade deals, and that would have an impact on trade flows." Of course, that's not really an argument in favor of inserting them. Denying market access to poor countries doesn't make them richer, and poor countries tend not to care about labor and environmental standards.
Comments: Here's the short answer: they have to pander to the left in order to win the nomination. That's why their criticism of NAFTA is asymptotal-- it's a meaningless fight to see who can come closest to rejecting the treaty without actually doing so, because they're well aware that would be stupid. posted by: Edgar on 02.27.08 at 08:47 AM [permalink]I too am bashing my head against the wall. Clinton really is on the record as having been a supporter of NAFTA, and Obama generally has voted in favor of trade agreements. The solution to displaced workers IS NOT REPEALING TRADE AGREEMENTS!!! It's coming up with intelligent programs to help those workers. Ugh. posted by: Jo on 02.27.08 at 08:47 AM [permalink]I thought the solution to displaced workers is for them to get new jobs, even if that means learning new skills. I'm pretty sure there's nothing in the Constitution describing the government's responsibility to guarantee career paths. posted by: Justin (NC) on 02.27.08 at 08:47 AM [permalink]I'm not convinced by the statistics. Surely there's a lag time between passage of NAFTA, the implementation of its various provisions, economic effects, and job losses? I'm no economist, but if the Reps could claim that Clinton's boom was based on Reagan's policies, why isn't it reasonable to expect the overall lag time to be 10 years or so? Look at the auto industry--Toyota's been outselling GM and Ford for years. How long was it between when they started to lose market share and when they started to cut jobs permanently? I suspect years. Having said the above, I still support NAFTA--it's just the statistical case that's not proven. posted by: Bill Harshaw on 02.27.08 at 08:47 AM [permalink]attaching labor and environmental standards to trade agreements will have no appeciable effect on trade flows. I'm not so certain about this, at least for trade agreements among small groups of countries. I think you can make a case that if the US makes a trade agreement with country A, and that agreement does include labor and environmental standards, which presumably would increase the short term cost of doing business in that country, then many companies will be more/less likely to invest in that country. The mores presumably sensitive to social pressures in the US. The lesses more focussed on narrow cost considerations. Given high levels of inter-affiliate trade, it's quite easy to see how this could affect trade flows, especially for that portionof FDI that involves sequential country hopping in search of lower labor costs. Two caveats to this are that none of these potential effects would actually lower US imports (would just shift the exporting country), and these effects (essentially trade diversion) become less important as the particular environmental and labor standards are applied to more countries (.eg., if they became parts of WTO). posted by: Gene on 02.27.08 at 08:47 AM [permalink]Will someone please tell me what the hell a "trade time-out" is? I've heard HRC drop this twice over the last two debates and I have no idea what she thinks this means. posted by: Aaron on 02.27.08 at 08:47 AM [permalink]"poo countries"? (see last sentence). Where life is really crappy? posted by: Tom T. on 02.27.08 at 08:47 AM [permalink]A little history may be appropriate: In the Uruguay Round Agreements Act of 1994 which let the US join the WTO, Newt Gingrich inserted a provision that the US must "review" the WTO, in particular dispute settlement, every 5 years... and each of the two reviews have obtained sound support for the WTO. Meanwhile, we still describe trade critics as "protectionists" or populists. This is all confusing to even the most sophisticated US observors overseas, who wonder how the US could "review" (which to them could signal "repudiate" or renegotiate existing internaitonal agreements. They now view the Democrats as anti-internationalists and as leery of international law as George Bush. See todays Financial Times at http://www.ft.com/cms/s/0/b6dc1c0e-e669-11dc-8398-0000779fd2ac.html posted by: Susan Ariel Aaronson on 02.27.08 at 08:47 AM [permalink]Post a Comment: |
Politics, economics, globalization, academia, pop culture... all from a
Main home page Reviews of DanielDrezner.com: "Sharp but informal commentary on politics and foreign policy." -- The New Republic "Dan Drezner is terrific.... Excellent blog." -- Andrew Sullivan "Dan's stuff is always worth reading." -- Eugene Volokh "One of the essential weblogs." -- Gawker.com "Old battle horse of the blogosphere." -- Jewcy.com "Soft porn." -- Amitai Etzioni "Spawned grave atrocities and vast destruction." -- Glenn Greenwald "Monday morning quarterback... conservative robot... the very foundation of troubles in this country." -- not-so-random readers Contact me at: ddrezner@gmail.com (But click here to read my e-mail policy) Search the Site TNR's Open University Jacob Levy Glenn Reynolds Andrew Sullivan Mickey Kaus Virginia Postrel The Volokh Conspiracy Josh Marshall Crooked Timber OxBlog Real Clear Politics Kevin Drum Across the Aisle Economist's Free Exchange TNR's The Plank NRO's The Corner TAP's Tapped America Abroad Duck of Minerva Opinio Juris Brad DeLong Jeff Jarvis Mystery Pollster Mark Kleiman Meryl Yourish Megan McArdle Marginal Revolution Michael Munger Chris Lawrence Matthew Yglesias Hit and Run Cold Spring Shops Stephen Green Outside the Beltway Pejman Yousefzadeh Laura McKenna (11D) Elected Swineherd Phil Carter Joe Gandelman Winds of Change Andrew Samwick Greg Mankiw Dani Rodrik Roger L. Simon Tom Maguire Greg Djerejian The American Scene Post Global Democracy Arsenal Recent articles online "Foreign Policy Goes Glam."The National Interest, November/December 2007 "Rise of the Hipster Statesmen." Newsweek International, November 1, 2007 "The New New World Order." Foreign Affairs, March/April 2007 "Mind the Gap." The National Interest, January/February 2007 "The Grandest Strategy Of Them All." Washington Post, December 17, 2006 U.S. Trade Strategy: Free Versus Fair Council on Foreign Relations Press, September 2006. Complete online article archive Blog Archives June 2008May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006 August 2006 July 2006 June 2006 May 2006 April 2006 March 2006 February 2006 January 2006 December 2005 November 2005 October 2005 September 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 February 2005 January 2005 December 2004 November 2004 October 2004 September 2004 August 2004 July 2004 June 2004 May 2004 April 2004 March 2004 February 2004 January 2004 December 2003 November 2003 October 2003 September 2003 August 2003 July 2003 June 2003 May 2003 April 2003 March 2003 February 2003 January 2003 December 2002 November 2002 October 2002 September 2002 Academia Area studies Book club culture economics fence-sitting from Blogger globalization homeland security international relations law Mediasphere My very important posts New Republic outsourcing personal politics Sports The blog paper the blogosphere thesis ideas Trade and Development U.S. foreign policy website maintenance See full archives listing Recent Entries • Someone keep Fleet Street away from Bill Clinton• It rivals Buckley vs. Vidal, I tell you • So.... are the Clintons morons? • The New York Times didn't ask me, but then again, that's why I have this blog • Monica Crowley's jet black pot • Al Qaeda is losing • Speaking of karma.... • The blog post that writes itself • What made me laugh today • Where should Hillary go? Site Credits |