The politics of NAFTA have been driven more by story than by fact

As the United States enters into negotiations with Mexico and Canada about changes to North American Free Trade Agreement (NAFTA) this week, we will hear much hue and cry about the allegedly negative impacts of NAFTA and the dire need to renegotiate it. President Trump, with his characteristic bluster, has threatened to “tear it up.”

Abandoning NAFTA would do nothing to help Americans struggling to make ends meet and would distract from addressing our real economic challenges. Some challenges include: how to help raise the incomes of average Americans, close the growing gap between rich and poor and expand the number of workers who benefit from a global economy.

{mosads}The undramatic truth is that NAFTA was never truly villain or hero.

From the beginning, the politics of NAFTA have been driven more by story than by fact. During the fierce battle leading to the 1993 vote in Congress, NAFTA’s opponents cast the deal as the villain in an impending tragedy. They warned of “a giant sucking sound” of jobs fleeing to Mexico, the loss of American sovereignty or a contagion of corruption.

For its champions, NAFTA was the hero in a battle between free trade and the nefarious forces of protectionism. For example, take a look at Al Gore versus Ross Perot on Larry King Live.

They said it would create thousands of jobs and make America more competitive vis-a-vis Japan.

Simple stories satisfy, but the true story was neither tragedy nor triumph. The reality is far more mundane. NAFTA caused neither a giant sucking sound nor a massive economic boom. The near consensus of the many studies that have been conducted since NAFTA’s passage is that the net effects of NAFTA on the United States were quite modest: a small gain of jobs, a slight improvement in average wages, a minor spur to environmental cooperation and, at least before Trump, an overall improvement in our long-troubled relationship with Mexico.  

Yes, there were losers in particular industries  — apparel and furniture were particularly hard hit in my home state of North Carolina — and government did far less than it should have to help impacted workers and communities, but most of the decline in these sectors was not caused by NAFTA.

The truth is that many of jobs that left for Mexico would have left anyway, NAFTA or no NAFTA. The same, of course, should be noted for the millions of jobs created since NAFTA: Most would have been created without the agreement.

So, if NAFTA had such modest impacts on the United States, why the big fight, then and now? It’s because there was — and is — deep confusion about the actual effects of NAFTA.

For one thing, it is hard to disentangle the marginal effects of NAFTA from all the other factors at work in the international economy in the years since NAFTA came into force. Yes, trade between Mexico and the United States grew after NAFTA, but it would have grown substantially even without NAFTA. (NAFTA had even less of an effect on trade between the U.S. and Canada, since we had a pre-existing bilateral free trade agreement.)

Patterns of trade are driven by much more than trade agreements. Since NAFTA’s passage, U.S. imports from China have exploded without a free trade agreement, and with likely a far bigger impact on American jobs than NAFTA. And technological change probably had an even bigger impact.  

But the confusion was and continues to be abetted by politicians and advocates, on both the left and the right, who have long found NAFTA a convenient scapegoat for a host of ills not of its making. President Trump’s promise to tear up NAFTA during the last presidential campaign was just the latest use of NAFTA as a lightning rod for disaffection with the economic circumstances faced by many Americans.

Economic inequality is one of the great problems of our time. The stagnation of the middle class and the ever-growing gap between the extremely wealthy and everyone else threaten our social fabric, manifesting in high rates of depression, a contributor to the opioid epidemic. If unchecked, economic inequality is an existential challenge to our democracy. But it is far too simple to ascribe these dangers to NAFTA.

NAFTA was always far from perfect and there is a need to update it — not surprising for an agreement negotiated a quarter century ago. But just as NAFTA did not cause inequality, killing NAFTA would do nothing to address it.

The danger is that the demonization of NAFTA will distract from the much harder work of figuring out how to make economic globalization more equitable, more inclusive and more sustainable.

Frederick Mayer is a professor at Duke University’s Sanford School of Public Policy and director of Duke|POLIS: The Center for Political Leadership, Innovation and Service. He is author of “Interpreting NAFTA” (Columbia University Press) and “Narrative Politics: Stories and Collective Action” (Oxford University Press). Follow him on Twitter at @Mayer_at_Duke.

The views expressed by contributors are their own and are not the views of The Hill.