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w daley on nafta

Thursday 6 March, 2008

David Greising of the Chicago Tribune scooped me by interviewing William Daley, brother of Chicago’s mayor Richard J. Daley, about the North American Free Trade Agreement in His own free-trade truce This whole hullaballoo over NAFTA kind of surprises me because it was passed during democrat Bill Clinton’s administration. I wasn’t aware that he was accused of letting corporations write that trade treaty. Being educated in international economics, I’m a free trade advocate, so generally, I think NAFTA is good. What’s seldom mentioned is that the US being able to export more to Mexico (the US already had a free trade agreement with Canada even before NAFTA) creates more jobs. Whether or not that offsets the jobs we lose that are outsourced there, I can’t say. Theoretically, the argument against NAFTA is that Mexico is not held to the same standards as the US for labor & the environment, & therefore has an unfair competitive advantage. Because they don’t have the same OSHA standards for workers & EPA standards to protect the Earth, they are able to unfairly pay lower wages to workers there. As Barack correctly notes, the optimal solution is to improve conditions in Mexico so that their workers are happy enough there that don’t want to immigrate here. Exactly that is happening to Turks in Germany-they are returning home because conditions have improved so drastically there. The Mexican market is open to us, we have reciprocal trade, & we are not patsies. China is the far greater threat because the cost differences are so much greater in manufacturing. Attacking trade is an easy political issue which plays well to labor & about which most can/will not do much. Letting low-skill jobs migrate to Mexico is not what’s killing the American economy. Exorbitant trade & budget deficits are. In my mind, it’s all about competition & the US is not doing such a great job in that area these days.

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