Taste for NAFTA sours
This is an archived article that was published on sltrib.com in 2008, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

MEXICO CITY - Four campaign seasons have come and gone since presidential hopeful H. Ross Perot warned that NAFTA would create a ''giant sucking sound'' of jobs going to Mexico, and the trade pact is still generating plenty of noise. Calls to renegotiate the 14-year-old deal are rising from both sides of the border.

Thousands of protesters paralyzed traffic in Mexico's capital in January to demand a redo of the pact, which they said had hurt Mexican farmers. In the United States, the North American Free Trade Agreement has loomed large in states such as Ohio, which last week hosted a crucial presidential primary.

The Rust Belt has shed hundreds of thousands of factory jobs since 1994, when the U.S.-Canada-Mexico trade bloc was implemented. Ohio alone lost a net 50,000 jobs as a result of NAFTA, according to a 2006 analysis by the Economic Policy Institute in Washington, and 250,000 factory jobs in all since 1994.

While campaigning in Ohio and elsewhere for the Democratic nomination, Sen. Barack Obama and Sen. Hillary Rodham Clinton have said the deal, at the very least, needed to be retooled to protect American workers. Failing that, both have said that as president they would pull the United States out of the agreement.

''Let's get real about NAFTA. It simply isn't working for all Americans,'' Clinton said at a recent rally in Youngstown, Ohio. If elected, she said that short of ending the agreement, she would call for a temporary freeze on new trade pacts and a thorough review of existing ones. Obama has said he wants stronger labor and environmental provisions put into NAFTA and other accords, but he had to fight off criticism last week that his campaign gave Canada back-channel assurances that his harsh words for NAFTA were for political show.

Clinton scored a double-digit win over Obama in the Ohio primary, and although both Democrats roundly condemned NAFTA while in the Midwest, they were relatively silent about the matter while campaigning in Texas, which has seen an economic renaissance along its southern border since the agreement came into effect.

For his part, likely GOP nominee John McCain has bemoaned the flight of manufacturing jobs, even as he asserted his support for free-trade agreements. He argues that rather than lament NAFTA, it is time to come to grips with the changing economy.

Growing wariness

Whether talk of revamping NAFTA amounts to more than election-year stumping remains to be seen. Three-way trade has soared and unemployment in the United States is substantially lower now than it was 14 years ago - 4.9 percent in January, compared with 6.6 percent in January 1994. American shoppers have benefited from lower prices on imported goods, and U.S.-based multinational companies have boosted their competitiveness by whittling production costs.

Yet there is growing wariness among the public that the United States is giving away more than it's getting. The nation has lost 3.1 million manufacturing jobs since 1994, and its trade deficit with Mexico and Canada has risen from $9.1 billion in 1993 to $138.5 billion last year.

Lawmakers critical of the Bush administration's trade policies picked up 37 congressional seats in the 2006 elections, according to Global Trade Watch, a Washington-based advocacy group. Although Congress approved a free-trade pact with Peru in December, pending deals with Colombia, Panama and South Korea have stalled.

It's not just Democrats who want a timeout. Six in 10 Republican voters have said free trade has hurt the United States and that they would support tougher import restrictions, according to a Wall Street Journal-NBC News Poll.

''We're seeing the strongest opposition to free-trade expansion in recent memory,'' said Eric Farnsworth of the Council of the Americas, a business group that promotes open markets. ''NAFTA has become symbolic of the fears and apprehensions of globalization in general.''

Despite promises that NAFTA would help keep Mexicans at home, illegal immigration to the United States has accelerated. About two-thirds of the estimated 12 million illegal immigrants in the United States have arrived since 1995, according to the Pew Hispanic Center. Many hail from rural Mexico - casualties, critics say, of a trade deal that pitted highly subsidized U.S. and Canadian agribusiness against Mexican producers working tiny plots.

''Policymakers in the United States realize they have created a monster, and that monster is devouring them.'' said Raul Fernandez, a professor of Chicano/Latino Studies at the University of California, Irvine.

Bush centerpiece

Free-trade agreements have been the centerpiece of the Bush administration's relations with Latin America, where the United States has long promoted democracy, privatization and open markets as the prescription for the region's woes. Free-market advocates are concerned that rising U.S. protectionism will signal a retreat from these principles just as Washington is losing influence to populists such as Venezuelan President Hugo Chavez.

Despite strong economic growth in much of Latin America in recent years, trust in market economics is declining, according to a poll released in November by Latinobarametro, a Chilean opinion research firm. Millions are frustrated that privatization and falling trade barriers have done little to shrink income inequality. Survey respondents in Central America were particularly downbeat, despite that region's recent embrace of the Central American Free Trade Agreement, which includes the United States, the Dominican Republic, Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua.

In a separate 2007 opinion poll, Mexicans, by a 2-1 margin, said they disapproved of NAFTA, according to Mexico City-based polling firm Mund Americas. It's an about-face from 10 years ago, when Mexicans favored the deal by about the same margin.

The shift reflects disappointment that NAFTA hasn't done more to transform Mexico's economy. Although the nation's exports have soared and Mexico has attracted record levels of foreign investment, more than 40 percent of its citizens still live in poverty. The nation isn't creating enough jobs to keep up with population growth.

Under the agreement, the last tariffs in Mexico on agricultural products were lifted Dec. 31. Although Mexico had 14 years to prepare its farmers with subsidies, technical assistance, land reform and other help, many small growers say it failed to do so. They want President Felipe Calderon to renegotiate NAFTA's agricultural chapter to restore tariffs on commodities such as corn and beans.

But his administration has opposed any such move. NAFTA backers note that some Mexican farmers have prospered under the deal. Although only about 5 percent do any exporting, they've been so successful at sending avocados, tomatoes and other fruit north that Mexico now runs a trade surplus in agricultural products with the United States.

Can't stop globalization

Although even critics of NAFTA agree there's no turning back globalization, they say the United States must get tougher in demanding equitable exchanges. Others want strict enforcement of labor and environmental laws in developing countries and more help for affected laborers on both sides of trade agreements to get retraining and financial aid if they lose their livelihoods.

Jeff Faux, founding president of the Economic Policy Institute, said pulling out of the deal would be impossible given the links that have been forged among the United States, Canada and Mexico over the past 14 years. But he said the talk among U.S. presidential candidates about renegotiation showed how attitudes had changed since President Clinton signed NAFTA into law.

Former President Clinton ''used to say, 'If it doesn't work, let's redo it.' Well, it's not working. . . . It's time to rethink the whole strategy."

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* THE ASSOCIATED PRESS and BLOOMBERG NEWS contributed to this story.

Candidates not alone in calls for overhaul
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