Obama and Clinton May Want to Hold Their Abrogatin' Horses

Renogotiating NAFTA may be a good idea, but it may not be what Americans really want

In a presidential campaign in which -- depending upon whom you ask -- the Democrats appear poised to seize the presidency (that is, if they can maintain their momentum of the past four years), it was only a matter of time before the North American Free Trade Agreement came up.

And now it has.

During last night's Democratic debate both Hillary Clinton and Barack Obama declared their intention to abrogate NAFTA unless it's renegotiated.

"I have put forth a very specific plan about what I would do. And it does include telling Canada and Mexico that we will opt out unless we renegotiate the core labour and environmental standards," Clinton announced.

"I think actually Senator Clinton's answer on this one is right," Obama agreed. "I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labour and environmental standards that are enforced."

As noted previously, Obama and Clinton actually have a pretty good point there. NAFTA is in definite need of labour and environmental standards. To this end, it isn't alone: most free trade agreements do.

Solid environmental standards implimented via, and enforced by, NAFTA, could be infinitely more effective in curbing such issues as climate change than dead-end treaties like Kyoto could ever dream of.

And any changes to NAFTA that would make it more difficult for short term profit-seeking corporations from shipping manufacturing jobs abroad into the world's cheapest labour markets would be a boon not only to the American and Canadian middle class, but ironically to those companies themselves (although shortsighted profit-seeking motives blind them to it).

There is, of course, one other excellent reason to renegotiate NAFTA -- one that no American president should be altogether comfortable with. That reason is that the Americans themselves have rarely fully abided by it.

American economic protectionism -- particularly under Democrats -- has long been established. And while such protectionism generally springs from mercantilist modes of economic thought that are actually incompatible with the concept of free trade, that hasn't stopped the allegedly pro-free trade Americans from refusing to abide by their own agreements.

The softwood lumber dispute is the greatest case in point. While the American government accused Canada of maintaining an importing advantage by allegedly indirectly subsidizing Canadian lumber by keeping stumpage fees low.

Various trade commissions ruled in favour of Canada, all while the United States continued to defy virtually every ruling, ocassionally deferring back to their own trade commissions for rulings that -- quelle suprise! -- tended to be in their favour.

Thus, the position that the Americans would find themselves in under the conditions of a renegotiating of NAFTA: their economy desperately needing imports of Canadian resources (lumber, steel, oil and water, amongst a myriad of other items) and simply having not engendered the good will with their trading partners to wrestle any disproportionately favourable conditions out of them.

Of course to pretend that Canada or Mexico should be eager to put a squeeze on the Americans in a NAFTA renegotiation overlooks the undeniable interdependence of our three economies. After all, having resources is one thing -- you have to be able to trade them, and it's a looooooooong (and expensive) boat ride to China.

Which is precisely why we as Canadians -- as well as Barack Obama and Hillary Clinton -- should accept Finance Minister Jim Flaherty's words of caution.

"[They] should recognize that NAFTA benefits the U.S. tremendously," Flaherty warned. "Those who speak of it as helpful to [just the] Canadian or Mexican economies are missing the point."

As are we if we view NAFTA as only benefiting the American economy (and it certainly has).

The idea of renegotiating NAFTA need not necessarily be a non-starter. But both Obama and Clinton need to keep in mind what they need to bring to the table -- greater compliance, not economic protectionism -- in order to get what they want (which just so happens to be what we should want).

If they don't they may find themselves in a very uncomfortable position, even if that discomfort won't be theirs alone.

Despite "Presidential" Gaffe, Obama Has a Point

NAFTA needs to be renegotiated -- for various reasons

This past week, would-be Democratic presidential candidate Barak Obama provoked a notable response when he mis-titled the Prime Minister of Canada.

"I would immediately call the president of Mexico, the president of Canada, to try to amend NAFTA, because I think that we can get labour agreements in that agreement right now," Obama announced during a Democratic debate in Chicago.

While the remark has spawned numerous criticisms accusing Obama of lacking an understanding of foreign policy issues, many of the critics are overlooking a fundamental fact about Obama's gaffe.

Mostly, that he's right.

While Free Trade has benefited Canada's economy in various ways -- including allowing for increased flow of American development capital into Canadian industries -- NAFTA has, in many respects, turned out to be a failed god economically.

Part of this has to do with fundamental flaws in free trade regimes. Free trade is an economically sound concept. It focuses around the belief that every different country in the world possesses areas of competitive advantage, and encouraging countries to focus on their areas of competitive advantage allow for an aggregate increase of production of those various products, thus benefiting everyone by making them superior, more plentiful, and cheaper.

This is free trade in theory. In practice, free trade has turned out to be very different. For one thing, because it focuses on generating wealth through aggregate production increases that are pursued through an economic environment that encourages non-competition in areas of competitive advantage, the concept of trade deficits should not be part of the economic lexicon of a free trading state.

Yet, the trade deficit has become something of an obsession for some American economists. An economic moral panic emerged when 2003 turned out to be a record year for the American trade deficit, as the United States imported 17.1% more than it exported. Under proper free trade principles, this is entirely to be expected in a country whose comparatively strong currency gears its economy toward importing.

Of course, this is an area where free trade theory fails. Comparative advantage may encourage countries to import more than they export, but this importing must be sustainable, and it becomes unsustainable if insufficient wealth is being produced within the country to finance such imports.

In particular, the outsourcing of American jobs into the Mexican market has become problematic. As American jobs are exported to Mexico, putting those once employed out of work, this undermines the economic viability of the United States, in both its private sector (as exporting manufacturing jobs also undercuts the domestic market for those products), as well as the public sector (as the tax revenue lost harms the government's ability to operate and remain fiscally solvent).

Part and parcel of this problem is the comparatively poor wages paid to such workers in Mexico, which also contributes to the problem of illegal immigration into the United States, as Mexican workers smuggle themselves north in order to live in the United States and enjoy its far superior labour conditions.

NAFTA has also contributed to the spread of sweatshop work conditions in Mexico. This is no surprise, as this has turned out to be the case almost anywhere where free trade policies have allowed business from developed countries to exploit the lax labour laws of such countries.

This is actually natural under free trade, as labour becomes a comparative advantage for countries that have such lax conditions -- advantageous for nearly everyone involved but the workers; those who would be unemployed, and those who would be exploited.

When Barak Obama talks about the need for labour agreements to become part of free trade agreements, he isn't demonstrating a lack of understanding of the issue. In fact, he's demonstrating rare and remarkable clarity.

The other reason why NAFTA needs to be renegotiated is that the United States has, of late, has refused to abide by it.

Consider the recently-settled trade dispute between Canada and the United States in regards to softwood lumber. During the dispute, the United States argued that the Canadian government unfairly subsidized softwood lumber producers.

NAFTA and World Trade Organization rulings routinely favoured Canada (although one NAFTA ruling merely concluded that the tariffs being imposed were too high, although tariffs were, in principle, justified).

Yet, the United States refused to abide by the rulings, all along insisting that Canada negotiate with them. A 2003 attempt to negotiate such a deal failed, although a deal was reached in 2006, amidst great controversy.

As a treaty signed between the United States, Canada and Mexico, NAFTA represents international law. Yet international law is administered essentially in two ways: what countries agree to do (as in the case of NAFTA) and what countries actually do (as in the softwood lumber dispute).

As such, NAFTA is already a broken agreement, and needs to be either renegotiated or scrapped althogether. Because Free Trade has proven to have economic benefits for everyone involved -- fuelling Canadian economic growth through the acquisition of development capital and increased exports and fuelling American economic growth by making it easier and cheaper to acquire the necessary resources -- the necessary action is pretty clear: NAFTA needs to be renegotiated. The case for scrapping it outright is rather thin.

If Obama, as the American president, does choose to renegotiate NAFTA, he'll need to be very careful about how he goes about it. The United States desperately needs the resources it can acquire in Canada, and any move that hurts Canadian business by making it harder to export south of the 49th parallel will only hurt the American economy more, possibly even forcing it to the verge of strangulation.

If one presumes that Stephen Harper will still be Prime Minister by the time Obama has hypothetically taken office, this is something that can pay dividends for him, as well. He would do well to see a Conservative Prime Minister building an amicable relationship with a Democratic president (something that hasn't occurred since John Diefenbaker and John F Kennedy put the two parties at odds).

Most importantly, however, the United States will have to learn to abide by NAFTA one way or the other, and find ways to stop the treaty from stabbing America's working class in the back.

In the meantime, Barak Obama could stand to get better acquainted with Canada.

A Tale of Two Traitors

Emerson and Stronach are no different -- and both should have faced by-elections

It's no great secret that since his post-election defection to the Conservative party, David Emerson has become one of the most controversial figures in Canadian politics.

When he was elected in the riding of Vancouver Kingsway, Emerson promised he would be Prime Minister Stephen Harper's "worst nightmare". Instead, he secretly crossed the floor from the opposition Liberals to sit as the Conservative Minister of Trade and the Pacific Gateway. His duplicity was entirely unknown to Canadians of all political stripes until he was caught by news cameras emerging from the inaugural Conservative cabinet meeting -- he had just been sworn in.

Now, Canadians of all political stripes are calling for Emerson's resignation. Leading this campaign is Vancouver Kingsway constituent Manuel Pereda. Along with Kevin Chalmers, a key fundraiser for the Emerson campaign, Pereda has organized his own little protest movement. At one point he even paid for an airplane to fly over Ottawa with a trail instrucing Emerson to "call home".

An online petition demanding the recall of Emerson (found at www.petitiononline.com/mod_perl/signed.cgi?RDE) currently has 20810 signatures -- more than enough to inspire some sober second thought from Emerson. However, it is obvious this has yet to come. Emerson has developed a habit of denouncing his critics as "partisan zealots".

Resultingly, Pereda is getting little response from Emerson. Pereda reports, " He responds to all my questiosn with one single sentence: his sentence is he's only accountable to constituents at election time."

Naturally, Emerson has tried to shy away from this attitude in public statements, saying, " the reality is I was elected. Once the election was over, I was faced with a decision on how to best serve the people of the riding, and that's all the people of the riding... I concluded I could better serve them , I could get more done, I could get more results for British Columbia if I was in the cabinet than if I was not."

Translation: " I'm bettering my own career, while claiming I'm doing so for my constituents. Meanwhile, as I claim that I am, in fact, doing this for them, I will disrespect them entirely."

Pereda's frustration with Emerson's arrogance and contempt for the electorate is familiar to many Canadians -- many felt the same way after the equally shameful defection of Belinda Stronach.

Certainly, there is one key difference: namely, that Emerson has made himself useful since crossing the floor, helping to settle Canada's softwood lumber dispute with the United States. Although the settlement didn't pull as many American teeth as critics of the settlement would have liked, it did resolve the matter faster than any Liberal government would have (then again, how much faster than "never" would he have had to be?). Stronach, on the other hand, took to a new cabinet position as the Minister for "Democratic Renewal", and proceeded to rest on her non-existent laurels. There is one other inexplicable difference -- Stronach was somehow able to get reelected after her betrayal. Now, one wonders if Emerson could accomplish the same feat.

Like any Member of Parliament who crosses the floor after election, Emerson owes it to his constituents to resign and run in a by-election.

It seems like the only party advancing in the interest in democracy is the NDP. On March 10, it was the NDP that requested that the ethics investigation into Emerson's defection also investigate the defection of Stronach. It is the NDP that is currently proposing legislation that would require any defecting Member of Parliament to immediately submit to a by-election in their riding in order to ascertain the will of their constituents.

In the wake of the last year, neither the Conservative party nor the Liberal party have any credibility on this particular matter. It may indeed be up to the NDP to address this very serious culture of duplicity, because anything the Liberals or Conservatives have to say on the subject will certainly be nothing more than partisan grand standing.

Bob Rae: Bush is Hitler, Harper Bad

Three cheers for the Munich Pact!

I told myself I was going to back off the Liberals for a little while.

I reminded myself I am trying to be non-partisan, for better or worse, and that the Liberals are suffering enough without my "help".

Then Bob Rae compared Stephen Harper's softwood lumber deal with the United States to the Munich Pact.

Fuck. And here I go:

Yes, you probably read that correctly. On May 10, Bob Rae -- yet another lousy candidate for the leadership of the federal Liberal party -- compared the Canada/U.S. softwood lumber agreement (under which the American government accepted Canada's most important conditions) to the Munich pact (under which Adolph Hitler and then-British Prime Minister Neville Chamberlain agreed that Germany would be allowed to annex Czechoslovakia), not only comparing Harper to one of the weakest political leaders in history, but also compared U.S. President George W. Bush to Adolph Hilter.

Coming from a former leader of the NDP, that's about as subtle as blitzkrieg.
Naturally, many Liberal party members have wanted to distance themselves from these comments. A phonecall made by Warren Kinsella, howver, was able to confirm that Rae did in fact make these comments.

On his website, www.warrenkinsella.com (yes, Warren named his website after himself -- subtle!), Kinsella wrote: " I am told: 1. [Rae] did, in fact, compare Harper to Chamberlain"; 2. He did, in fact, mention "Munic" but not the word "pact". Those are what some of us call a distinction without a difference. Do you think the analogy is appropriate? I sure don't."

Kinsella went on to suggest -- stop the presses! -- Rae owes Harper an apology: " Do you think Bob Rae should apologize? I sure do. Do you think he will? Don't hold your breath."

Even Warren Kinsella thinks Rae fucked up. Mister Rae, this is the best indication that you have, in fact, fucked up.

However, Rae has yet to take responsibility for his comments. On his website, www.BobRae.ca (he also named his website after himself), Rae makes no mention whatsoever of what he and his supporters would probably call a "minor blunder".
Many observers would speculate that what the Liberal party currently needs in a leader, more than anything else, is an individual who can look back at all the mistakes the party made over the past 15 years and learn from them. Evidently, Bob Rae is one of many who are incapable of doing this. After the embarrassment the party suffered with their infamous "a Harper election will make Bush happy" commercial (although not nearly as humiliating as their "troops with guns in our cities" ad), and the adverse effect it had on the party's ability to be elected, one would have thought that all Liberals -- even one as inept as Bob Rae -- would have been smarter than this.

Considering their reputation for being rampantly anti-American, the Liberal party may have wanted to show they can pursue a more productive relationship with Canada's largest trading partner -- then again, maybe not.

With a statements like this, Bob Rae may as well be telling people to vote for Osama bin Laden for the federal Liberal leadership.