Will Clinton Be A Good Neighbor?
January 1, 1995
Mexican President Carlos Salinas de Gortari’s threat to scrap the North American Free Trade Agreement (NAFTA) if Mexico has to make more treaty concessions to the United States is more pique than promise.
Having put on the line for the trade pact all his political capital and his future in the history books as the man who led Mexico away from incompetent socialism to booming capitalism, watch for Salinas to accede to the Clinton administration’s conditions.
That prediction assumes, of course, Clinton will want to pursue NAFTA, to which he gave a qualified endorsement during the waning days of the campaign.
With Congress controlled by Democrats, many of whom are opposed to any form of Mex-American trade pact (there are a fair number of Republicans opposed to NAFTA as well), Clinton could simply decide to let the issue fade away.
Doing so would certainly make House of Representatives Majority Leader Richard Gephardt—one of the most single-minded protectionists on Capitol Hill—more than happy. It’s no secret that Gephardt wants NAFTA dead and buried.
Letting NAFTA wither on the vine could also bring many economically myopic voters into the fold.
By denying Salinas NAFTA, Clinton could by 1996 inherit the resentment voters who sympathized with Jerry Brown’s labor-inspired denunciations of the trade pact, Pat Buchanan’s economic nationalism, and Ross Perot’s appeals to fear—particularly his fatuous claim that a “sucking” noise would be heard as our industrial base were vacuumed across the border if the pact were signed.
But Clinton, who has made job creation his number one priority and who needs to prove his foreign policy credentials, could choose to champion NAFTA and gain politically by doing so.
With NAFTA, Clinton would solidify an expanding trade relationship with an eager, consumer- and capital-goods hungry neighbor, which would spur job creation at home as well as help continue the revolutionary shift throughout Latin America away from state controlled markets toward freer markets.
If that is his decision, Clinton would be wise to defend NAFTA and its companion free market policy, the Enterprise for the Americas Initiative, far more aggressively than did President Bush, who, to be fair, did indeed show that “vision thing” by initially acting on Latin America’s phenomenal political embrace of free market reforms.
Clinton the Democrat can do politically what Bush the Republican could not: Clinton could make clear that NAFTA is not a free trade agreement, but rather a managed trade agreement. Doing so might sway many of Gephardt’s Democratic allies in Congress.
Under NAFTA, many sectors of the Canadian, American, and Mexican economies will be left to enjoy long-term protections until the treaty is completely phased in (well into the next century), providing safeguards for many of the most uncompetitive and inflexible U.S. industries. And even then certain economic sectors too intertwined with the sovereign identities of each country will largely be excluded from even managed trade.
But Clinton might also have to get tough with obstructionists in Congress.
The president-elect would then have to make clear that in the Global Village the United States ought to be the leading voice for expanding trade—not the village idiot trying to build trade walls when the rest of the citizenry is bringing its trade barriers down and thinking of phasing them out altogether.
NAFTA is a step—not a leap forward—in the right direction for all parties involved. But this single step can go a long way to creating freer markets, which can address problems such as illegal immigration caused by economic hardship much more effectively than the Mexican socialism of yesterday or a resurgence of American protectionism.
Salinas understood this early in his term. It was therefore with good reason that his many free market economic reforms were dubbed “Salinastroika” by Latin Americans.
The Clinton administration must likewise recognize that for Mexico and Latin America, Salinastroika will be every bit as important as perestroika was to Europe.
Mexico is more important to the United States strategically than many of us think. Even Jerry Brown admitted as much, albeit long before assuming the title of labor’s advocate in the Democratic primary and labeling NAFTA a mercantilist plot.
“We’re inextricably linked with those people, and the sooner we realize it the better,” a prophetic Brown said while he was governor of California. “Mexico’s not an island. If something goes wrong in Mexico City, it will be felt in Los Angeles and El Paso.”
Brown’s observation is one that Clinton would do well not to neglect, and one that Brown, who continues to rail against the trade agreement, plus Gephardt, Buchanan, and Perot, would do well to remember.
