Clinton and Obama’s Anti-NAFTA Bender

Anti-free trade rhetoric is “in” this campaign season in the U.S. While it is a gauche trend, there is reason to hope it will be a passing fad.

Cleveland, Ohio was the site of the Democratic Presidential hopefuls’ latest debate. Here anti-NAFTA posturing reached its peak with Senator Hillary Clinton declaring that if she could not “renegotiate” NAFTA, then she would “opt out” of it. Senator Barrack Obama agreed.

Neither bothered to mention that because of NAFTA, Ohio benefits from US$11.6 billion in bilateral trade with Canada, or that Canada is Ohio’s largest export market.

Both Clinton and Obama have economic advisors that have undoubtedly told them about NAFTA’s mutual economic benefits – but this is the primaries. It is a time to play to their base. Once they’re in a general election or in office is apparently the time to sort out rhetoric from reality. Indeed, it was the same approach taken by our own former Prime Minister, Jean Chrétien, when he famously broke a promise to withdraw Canada from NAFTA.

NAFTA will always be an easy scapegoat for economic malaise, because it is the largest and most important trade deal between our two countries. While it may be easy for Canada to dismiss anti-NAFTA rhetoric in the U.S. as election posturing, it is nevertheless beamed into the homes of millions of Americans who are keenly watching the election.

Canada should not take its economic relationship with the U.S. lightly. The greatest weapon in this arsenal, as is often the case, is the facts. Fortunately, there has already been a response from the U.S. administration, but much more is needed to counteract the misinformation about NAFTA being spread during the Democratic primaries.

U.S. Trade Representative Susan Schwab has pushed back, telling Reuters “We do our citizens a disservice if we pretend that trade is the cause of economic evils.”

One would hope that Senator McCain and leading American think tanks would also come out more forcefully on the issue, pointing out the economic backwardness of the positions being taken by Obama and Clinton.

The facts on U.S. benefits from NAFTA speak for themselves. California has US$31.7 billion in bilateral trade with Canada, supporting 832,250 jobs in California. On the other side of the country, 1.8 million New Yorkers visit Canada annually, while 2.6 million Canadians visit the state annually. In the south, Canada-Texas trade is valued at US$24 billion, supporting 521,750 jobs. No doubt, it was for that reason that NAFTA was not flogged as badly during the Obama-Clinton debate in Texas last week.

NAFTA also remains vital to Canada’s economic prosperity. Our trade agenda has taken on new prominence with the significant, albeit largely symbolic, recognition that China has leapt past Canada as the number one exporter to the U.S. at US$321.5 billion in 2007.

Canada must invest time and resources on an ongoing basis to ensure the efficiency and perceived fairness of NAFTA for all parties. Economic downturn is not the only threat to the relationship. The U.S. remains focused on security concerns at its borders, as the Western Hemispheric Travel Initiative’s passport requirement remind us.

Last week while I was in Washington, D.C., I made a pilgrimage down Pennsylvania Avenue to the Canadian Embassy. Interestingly, what greeted me in the lobby was a pair of six by twelve foot maps depicting trade between Canadian provinces and American states.

Three massive arrows on one of the maps marked “Oil”, “Natural Gas” and “Electricity” flow south from Canada. With energy security remaining a hot button issue in the U.S., pointing out American reliance on Canada bears repeating. It is surely one of the reasons that Prime Minister Stephen Harper in his speeches abroad has referred to us as an “energy superpower”.

When the primary hangover is over, Clinton or Obama as victor will wake up to remember promises they made to win the prize. Campaigning against NAFTA in vote-rich California, New York and Texas and dozens of smaller states that have clearly benefited from free trade under NAFTA would be foolhardy.

In a national campaign, state borders simply do not allow a Presidential candidate to take one position in one state and the opposite position in another. As a result, we can hope that this latest anti-NAFTA rhetoric will have a short shelf life.

For more information on the Canada-US trade relationship, click here

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