This election year has seen the most concerted, dangerous attack on free trade since the passage of the North American Free Trade Agreement in 1993. From both the right and the left, leading presidential candidates have savaged NAFTA and the Trans-Pacific Partnership, a 12-country pact among Pacific nations currently awaiting a vote in Congress. No matter what happens in November, these underlying political sensitivities are not going away.
Critics of NAFTA and the TPP are wrong to suggest that free trade is harmful for America. On the contrary, a full retreat into autarky has almost always hurt the U.S. economy.
But given the emotion surrounding this election, simply repeating age-old arguments in favor of free trade will not suffice. To protect free trade from its enemies, supporters must also admit that trade deals are always imperfect — they produce losers as well as winners — and where problems exist, we must offer solutions. Only through such honest reflection will Americans regain their faith that free trade is good for the U.S. and the world.
Rather than make changes to NAFTA, which would open up a Pandora’s box of contentious issues, the U.S. should pursue additional and updated side agreements with Canada and Mexico. In much the same way that the labor and environmental side agreements were crucial to securing congressional approval for NAFTA, these new accords will serve to counter the arguments of critics like Bernie Sanders and Donald Trump who believe that regional free trade reduces workers’ rights, weakens national security and privileges vested interests above democratic principles.
Such additional side agreements must address three core issues: security, labor rights and anti-corruption. This is not an exhaustive list; infrastructure and human capital are also obvious priorities for ensuring long-term economic well-being. But these three areas represent the chief arguments from free trade critics. They are likely to find a receptive audience in the three NAFTA members and provide long-term reassurance for an American electorate that has grown tired of internationalism.
First, the U.S. must ensure that no free trade agreement puts national security at risk. The recurring paranoia over the United States’ borders with Canada and Mexico has been keenly felt during the primary and now the general election season. Despite the stark lack of evidence that terrorist threats are imminent across the Mexican and Canadian borders, concern over the flow of migrants and the potential for security breaches of the American homeland dominated the Republican debates, and appear to find a strong resonance among a segment of U.S. voters.
North American leaders could address these concerns by revisiting the concept of a regional “perimeter security” agreement that would produce much greater collaboration among the three governments on homeland security issues. A perimeter security deal would involve a series of measures to harmonize standards for entry and to share data on individuals entering the North American region. For example, an individual entering Mexico would have their profile cross-checked against U.S. and Canadian databases to make sure that they do not pose a threat to any of the three countries. It would also enhance intelligence collaboration and provide benefits for the movement of goods within the region.
While some elements of perimeter security, including intelligence sharing, and trusted-traveler and trusted-shipper programs already exist among the three countries, a trilateral agreement would provide greater collaboration on critical security issues. Such an accord would both reassure those who fear the weaknesses of Canada and Mexico, and would relieve pressure on intraregional trade at the borders separating the NAFTA partners.
Second, both Sanders and Trump hit a nerve in the American electorate when they referred to the damaging impact of NAFTA and free trade on U.S. workers. Measures to protect workers and raise labor standards have been a welcome addition to the TPP but that agreement faces stiff opposition in Congress.
Despite this lack of support, the next president should take the more progressive elements of the TPP’s labor agreement and offer them as an updated NAFTA labor side agreement, bringing the 1994 agreement into the modern world. Such an agreement should include fully enforceable requirements to protect the freedom to form unions and bargain collectively, prohibitions against exploitative child labor and forced labor, protections against employment discrimination and requirements for acceptable conditions of work.
The TPP has been marketed as an agreement that would adopt the highest labor standards of any trade agreement; in its absence, an upgraded NAFTA side agreement will help to assuage the fears of those who see unfair labor competition within our region. Another key component will be effective monitoring of these issues. Critics have disparaged free trade deals by arguing that the U.S. has failed to enforce labor rules in past agreements, leading them to doubt even the stronger protections in the TPP. Close collaboration among the three governments in cooperation with international organizations like the International Labor Organization and labor union groups like the AFL-CIO would greatly enhance both the capacity of countries to enforce tough labor standards and the credibility of those standards to trade critics.
Finally, corruption has become one the biggest sources of citizen dissatisfaction with democracy around the world and has damaged citizen faith in the free market economic model. All three NAFTA partners have taken action to reduce corruption in recent years. But more needs to be done in order to restore citizens’ faith in trade.
Mexico, the U.S. and Canada should work together to reduce the scope of corruption through a new North American tribunal on corporate corruption. Such a North American anti-corruption agreement would be an ambitious undertaking, but the benefits would be significant by helping Mexico raise its own standards while also preventing unfair competition from companies from other regions of the world with weaker anti-bribery rules. Under this agreement, citizens and corporations could present accusations of graft before the tribunal, which could then provide an impartial expert legal opinion on whether corruption laws have been violated. This would also give cause for similar legal action at the national level. And by giving exposure to corruption cases in a forum endorsed by all three governments, a North American anti-corruption agreement would also act as a “name and shame” mechanism.
Compliance will still be a key issue but civil-society organizations such as Transparency International and similar outfits could be engaged to assist with ensuring full compliance of national anti-corruption legislation. By reinforcing the fight against corporate and political graft, citizen faith in the free market economic system can be restored. Improved continental security, stronger labor standards and tougher anti-corruption practices are crucial elements to address the shortfalls of NAFTA and free trade. Protectionism was not a solution in the 20th century and it will only worsen our current challenges.
However, free trade remains under siege and NAFTA is not perfect. Our proposed reforms would benefit citizens across the U.S., Mexico and Canada and ensure that free trade remains the norm for the most economic competitive region in the world.
Publicado por Político
— IMCO (@imcomx) September 28, 2016