Nafta, Cafta, or Shafta - AKA Shafted

When we think about NAFTA, most of usaccord expresses our confidence in economic
automatically think about two things, Bill Clinton andfreedom and personal freedom, in our peoples'
lost jobs. Most people when they hear the wordenergy and enterprise. The United States, Mexico,
NAFTA, think NAFTA, CAFTA, or SHAFTA (as inand Canada have already seen the powerful and
shafted), but that's because they don't know thebeneficial impact of freer trade and more open
history. Bill Clinton has consistently received bothmarkets. Over the past 5 years, as President Salinas
praise and criticism for the North American Freereduced trade barriers under his bold reform program
Trade Agreement and little credit for job creation.and as Prime Minister Mulroney and I implemented the
The fact is there were 23.1 million jobs created duringUnited States-Canadian Free Trade Agreement, trade
Bill Clinton's eight years in office, but the increases inbetween our three countries has soared. In 1992
payrolls during his tenure have been offset by thealone, that trade will reach an estimated 3 billion, up
loss of jobs in the George W. Bush [Bush 43]billion just since 1987...
presidency due to foreign trade.His full speech may be read at the following link at
Is Bill Clinton responsible for these job losses? Thethe George Bush Presidential Library.
answer is absolutely not - for two reasons.The Clinton administration promoted the free trade
The losses we are experiencing in labor markets areagreement between Mexico and Canada and NAFTA
losses due to cheap labor rates in India, China andwould never have been passed without the
other overseas countries, not due to the Northoverwhelming support of the Republican members of
American Free Trade Agreement.Congress.
Second, the North American Free Trade AgreementClinton was for free trade between the three
was a twinkle in the eye of Ronald Reagan as can becountries, and NAFTA would be good for the US if
determined by the following statement made duringthe price of crude oil hadn't skyrocketed over the
his speech announcing his candidacy for President inpast seven years.
1979.The U.S. International Trade report released February
"It may take the next 100 years but we can dare to14, 2008 indicated a 2007 trade deficit with Canada
dream that at some future date a map of the worldof $64.2 billion The increase in imports from Canada
might show the North American continent as one inwas primarily due to crude oil and pharmaceuticals.
which the people's commerce of its three strongWe're also running a 2007 trade deficit with Mexico
countries flow more freely across their presentof $74.3 billion for probably the same reason. Mexico
borders than they do today."and Canada are our two biggest non-OPEC oil
The Canada-United States free trade agreement,suppliers.
CFTA, went into effect on January 1, 1989 and wasHowever, neither of the countries in NAFTA can
eventually incorporated into NAFTA duringeven begin to compare with the $256.3 billion trade
negotiations by the George H.W. Bush (Bush 41)deficit with China for 2007. No crude oil was imported
administration.from China during 2007.
Following is an excerpt made by President GeorgeThe question that should be asked on NAFTA is who
H.W. Bush during the initialing ceremony for NAFTA.would benefit the most from the North American
This speech was made October 7, 1992 - a monthTrade Agreement IF the United States was not so
before Bill Clinton was elected to office and threedependent upon crude oil as an energy source?
months before he took office.Three Presidents, Ronald Reagan, George H.W. Bush,
...Today the United States, Mexico, and Canadaand William J. Clinton promoted the idea over a period
embark together on an extraordinary enterprise. Weof almost thirty years.
are creating the largest, richest, and most productiveWhat has not been taken into consideration is the
market in the entire world, a trillion market of 360devastating effect the increased price of oil would
million people that stretches 5,000 miles from Alaskahave on trade balances between the three countries.
and the Yukon to the Yucatan Peninsula. NAFTA, theJust over the past 12-month period of time, imported
North American free trade agreement, is anpetroleum prices have increased 66.9%. NAFTA is
achievement of three strong and proud nations. Thisgood, crude oil dependence isn't.