NAFTA both political symbol and economic reality

Times Staff Writer

Sens. Hillary Rodham Clinton and Barack Obama have become tough critics of U.S. trade policy as they campaign in Ohio, a state battered by trade-related job losses that holds a crucial presidential primary Tuesday.

In most of their exchanges on the issue, each candidate has accused the other of having spoken in positive terms about the North American Free Trade Agreement, a pact that is extremely unpopular among Ohio's blue-collar workers. But the skirmishing has done little to illuminate the complicated politics and policy questions surrounding NAFTA.

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What is NAFTA?

The North American Free Trade Agreement, pushed through Congress by President Bill Clinton in 1993 and enacted the following year, lifted most tariffs on trade among the U.S., Mexico and Canada. Trade among the three countries has grown enormously since then. But the deal included corporate protections that made it easier for some companies to relocate to Mexico, where labor is cheaper.

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Why is it a big deal in Ohio?

Ohio's manufacturing-heavy economy has suffered some of the steepest job losses of the last decade. It is hard to say precisely which losses were attributable directly to NAFTA, but Robert Scott, a trade expert at the liberal Economic Policy Institute, estimates that about 50,000 jobs in Ohio were lost between 1994 and 2004 as a result of NAFTA. That loss has been only a small part of Ohio's economic woes: Scott says the state has lost 200,000 jobs overall since 2001. Changes in NAFTA would probably do little to bring back those jobs. Still, a recent Rasmussen poll found that only 16% of Democratic primary voters in Ohio believed NAFTA was good for America.

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So is NAFTA just a political symbol?

In campaign rhetoric, NAFTA has taken on a prominence out of proportion to its economic impact. It is seen by many voters and politicians as a galvanizing symbol of economic anxiety about the changes wrought by globalization, not just NAFTA. At the same time, NAFTA has had broader economic impact over the last 14 years because its basic structure has been replicated in a series of subsequent trade agreements, including with Peru, Oman and the World Trade Organization.

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Are Clinton and Obama protectionists?

Both say they want to promote international trade but that they want trade agreements to be more advantageous for U.S. workers. Their Senate voting records on trade issues have been nearly identical -- and a mixed bag. They both opposed the Central American Free Trade Agreement but supported other pacts like the one pending with Peru. Although Clinton and Obama are sharply critical of NAFTA now, they both have made supportive comments in the past about the accord's economic benefits.

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What do they want to do with NAFTA?

Neither is calling for abandoning NAFTA, the more radical position espoused by John Edwards when he was running for president. Instead, Obama and Clinton say they want to renegotiate the agreement to set stricter labor and environmental standards for trading partners, a change they believe will increase U.S. competitiveness.

Both said they would threaten to pull out of NAFTA if Mexico and Canada would not agree to renegotiate it. Under the pact, any country can pull out with six months' notice, which would trigger a reinstatement of pre-NAFTA trade rules and tariffs. Trade experts doubt any president would actually withdraw from the deal, but the threat could be a powerful stick to get Canada and Mexico to renegotiate. If they did come to the table, Canada and Mexico would probably want to renegotiate other issues of their own, such as immigration policy.

Clinton also has called for a trade "time out" -- a moratorium on new trade pacts until a new trade policy is set. Obama has not followed suit.

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janet.hook@latimes.com

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