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A Short Case Against NAFTA

If you came to read this thinking that it was going to be a piece on throwing up protectionist legislation in order to ward off foreign vendors and their goods, you've come to the wrong place. This is not a tirade against international trade. In fact, those of us who are against NAFTA know that international trade, if done correctly, can help all nations involved. And not doing it correctly is exactly what we have against NAFTA and similar trade legislation that this country has entered into.

We have many laws in this country that our businesses must adhere to. And many of these laws concern the social safety net. Businesses have to contribute for such things as unemployment insurance, disability and social security. Other laws they must follow concern the environment. Nobody is really arguing that these laws aren't necessary, or good for the nation. We may argue that they need to be reformed in some ways, but we do recognize that they are good for our society as a whole. Having a social safety net and protecting the environment are things that civilized countries do. But all of these programs come with a cost for our businesses, and we must recognize that when we negotiate trade treaties.

There is no problem when our country signs trade legislation with other industrialized countries that have relatively the same social and environmental laws that we do. Since we are both on the same cost footing, we are not at a disadvantage when we compete. But to disregard these costs when negotiating trade treaties with third world countries is unconscionable. These types of countries have an unfair advantage over our industries since they don't have to worry about environmental laws, social service laws and, most of all, a minimum wage. Basically, we can't compete since the cost of doing business here is so much more expensive than it is over there.

People who support NAFTA will tell you that we are doing these countries a favor since they are gaining jobs and becoming more prosperous. They will also tell you that the jobs we lose will be made up in other areas. The truth is that we aren't doing them any favors. Most of these people are making wages that they can hardly live on. And since their government is anti-union, they have no voice to speak for them or help them obtain better working conditions. We like to say that in this country, we outlawed slave labor years ago. In looking at it from today's perspective, however, it appears that we've just exported it. Nobody is saying that we shouldn't try to help these countries in some way. But it's true that the incentive to reform their labor and environmental laws is far stronger before they are a part of the treaty than after they are a part of it. As for our own lost jobs, if the unemployed can find work, it's usually in the lower paying service area, such as retail. Even if they find manufacturing work, the wages are severly depressed due to the foreign competition. Those that can't find work end up straining the social safety net even further.

Economists have a theory that when all trade is free, countries will produce only what they are best able to produce. Since inefficiencies are purged from the marketplace, everybody becomes relatively industrious and prosperous. This will never happen in the real world, of course, as mother nature and human nature (meaning greed) will see to it that inefficiencies remain for a long time to come. Unfortunately, there is no such thing as global prosperity and there never will be, for if there was, it would lead to massive overproduction. This would cause an economic depression far more severe, and far more global, than the depression of the 1930's. The sad truth is that the world will always need "have-not" countries for this very reason. The question is, will we become one of these have-not countries due to the poorly written trade laws that the President and Congress keep getting us into?

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