The real trade questions

Notwithstanding the promises of its proponents, NAFTA's goals were to reduce and eventually eliminate trade and investment barriers, and it did that. From 1993 to 2006, trade among the three countries nearly tripled -- to $846 billion from $289 billion. Canada and Mexico became our two largest trading partners. Foreign direct investment quintupled, tying the economies closer together and forging continental firms. If one measures success by whether a trade pact achieves its goals, NAFTA was a success.

Of course, the public's main concern with free trade is the effect on jobs. But in the first seven years of NAFTA -- the period when trade soared -- the number of new, relatively higher-paying U.S. jobs grew by 22.7 million. All (or perhaps even much) of the credit cannot be given to NAFTA, but it surely cannot be blamed for net job loss. Over the decades, there has been a steady decline in jobs in manufacturing and agriculture, but most economists conclude that is owed more to technology than to trade, and it reflects a natural progression to a more productive, service-oriented economy.

There is nothing wrong with improving the enforcement of NAFTA's labor and environmental provisions, but as a prescription for correcting the mistakes of trade agreements, it is filled with ironies. First, the United States was the author of these provisions, largely for political reasons, and Mexico and Canada accepted them. Second, the United States is the main culprit in failing to comply with the agreement.

Further, better enforcement won't solve our trade or job problems. U.S. firms do not move to Mexico to escape environmental laws or for lax labor laws. They do so for several reasons, one of which is the lower cost of labor -- but if that were the only reason, all would move to China.

In their hurry to attack NAFTA, Obama and Clinton missed the real issues. NAFTA accelerated economic and social integration, but the three governments have not kept pace. Two-thirds of trade goods are delivered on trucks, but the countries have built no new roads. The income gap between Mexico and its northern neighbors has not narrowed. Immigration from Mexico to the U.S. has grown worse, but so too has the flow of guns from the U.S. to Mexico. The border, which was supposed to have been flattened by NAFTA, has developed massive speed bumps since 9/11, turning the North American advantage into a disadvantage.

This extensive post-NAFTA agenda is what needs political attention. No two countries are more important to the U.S. in trade, energy, migration or security than Canada and Mexico. If we want to compete against China and Europe, we will need to build on our free-trade pact to create a North American customs union with a common external tariff. We should be working together on improving the environment and providing a safety net for all our workers. We need joint plans for infrastructure, immigration and dispute resolution.

Instead, leaders in Canada, the U.S. and Mexico all have been intimidated by parochial, antiglobalist forces. They have sought protection in private meetings with chief executives, thereby provoking the very suspicion that the critics fear -- that the governments are conspiring to merge into a North American Union. The real problem is quite the opposite: They are doing almost nothing related to North America.

One of the most important tasks for the new U.S. president will be to restore America's prestige in the world, but that will not happen until the world sees that we treat our neighbors with respect.

Robert A. Pastor, a professor and director of the Center for North American Studies at American University, is writing the forthcoming book, "The North American Idea."