Wall Street Jpurnal Op-ed: To Call Trade Deal ‘Nafta on Steroids’ Picks the Wrong Target

Wall Street Journal ^ | 06/16/2015 | Greg Ip

[SeekAndFind]

President Barack Obama’s push for a 12-nation Pacific trade deal stalled last week on surprisingly stiff opposition from Democrats, many of whom have cited the U.S. trade pact with Mexico as proof of all that can go wrong with free trade.

In labeling the Trans-Pacific Partnership “Nafta on steroids,” though, critics may have picked the wrong target. It is not the two-decade-old Nafta but China’s accession to the World Trade Organization in 2001 that offers the cautionary tale to legislators who must vote again once this week on whether to give Mr. Obama authority to complete the TPP.

With both Mexico and China, the U.S. hoped not just to benefit from increased exports, but to encourage liberal reforms in that country and strengthen geopolitical relations. Of the two, Nafta came closer to filling that promise.

Critics note that the U.S. went from a small surplus with Mexico in 1994 to a deficit of $30 billion, or 0.3% of total economic output, in 2000. But that had little to do with Nafta. The year after it went into effect, Mexico suffered a severe financial crisis, and the peso crashed. The depreciation and ensuing recession caused Mexican imports to plunge.

Once the peso stabilized and Mexico emerged from recession, the surplus persisted, but against the backdrop of large, and growing, two-way trade. Cross-border investment and supply chains grew significantly.

Nafta did cost some workers jobs or pay, but on net, both countries were better off as a result, though it is difficult to prove given the diversity of influences on both countries’ growth, the small size of Mexican trade relative to U.S. and the many obstacles to development Mexico’s poorer households still face.

Gary Hufbauer and Jeffrey Schott of the Peterson Institute think the U.S. gained 100,000 jobs per year

[Paulie]

Hasn’t the WSJ been rabidly pro open borders for some time now?

I’d rather get a copy of Investors Business Daily and see what their editorial people say. WSJ is too political and can’t be trusted for objectivity imo.

And you’ll make more money with IBD to boot.

[Buckeye McFrog]

“NAFTA on Steroids” is a very apt and accurate description.

[Mouton]

Who wrote this piece of tripe....Obama...Well, probably not because unlike Reagan, this guy has never demonstrated the ability to string together two sentences within one cogent thought.

All I know is we went how many decades with little or no “trade agreements”. As soon as they began to come down the pipe, was the first real one the GATT?, the country went from creditor to debtor status in a straight line. Now we want to import the dregs of these society and put them on our welfare systems. Gee, what could go wrong with that?

[ex-snook]

As soon as they began to come down the pipe, was the first real one the GATT?, the country went from creditor to debtor status in a straight line. "

Thanks. We have been unable to benefit from these trade agreements. It is obvious then why they have to remain secret. Agreements that are in the process of completion which take over many years, can't be considered to be on any kind of a fast track. Let's see what's in them and let's have a job impact study. No jobs gain here, no deal.

[Theoria]

Yes....most famous for the

In Praise of Huddled Masses-03 July 1984

Bartley wasn't finished, he put also put out Open Nafta Borders? Why Not?, before he finally expired.

[Georgia Girl 2]

They don’t call it the Wall Street Journal for nothing.

NAFTA is an ongoing disaster. I am ready to vote for Donald Trump because he is vowing to re-negotiate every trade deal we have. Thank God.