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CongressNow: NAFTA Faces Scrutiny Under Obama

If presumptive Democratic presidential nominee Sen. Barack Obama (Ill.) makes it to the White House, he has promised to review the 15-year-old North American Free Trade Agreement, which greases the flow of commerce between the United States, Canada and Mexico. But despite the support Obama is likely to get from skeptics of free trade such as labor unions, modifying the trade pact is going to be a difficult promise to keep.

A multitude of companies that have improved their bottom lines through NAFTA-linked exports would prefer the pact be left untouched, for fear that amending it could open a Pandora’s box of other changes. President Bush agrees with this assessment and advocates keeping the agreement intact.

Democrats want to strengthen the pact’s labor and environmental protections to ensure that emerging countries adhere to the same standards as developed nations. The Obama campaign did not respond when asked whether the Senator intends to review NAFTA if he is elected. Groups supporting a reopening of NAFTA, however, have high hopes.

“Sen. Obama made renegotiating NAFTA a major priority during the primaries, so we would assume that would be one of the first things he would do,” said Bill Holland, deputy director of Public Citizen’s Global Trade Watch, which is critical of NAFTA.

Procedurally, the modifications the critics want can be made, since the pact does allow amendments. But politically, the ride could get bumpy.

Bill Reinsch, president of the National Foreign Trade Council, suggested that the Obama administration would be naive to think that Mexican and Canadian negotiators would agree to labor and environmental changes without getting something in return.

“The first thing the Mexicans are going to say is, ‘Fine, let’s review the agreement. Let’s talk about getting our trucks into your country.’ The Canadians are going to say, ‘Sure, let’s review NAFTA — let’s talk about delays and the border, let’s talk about travel back and forth and all the documentary requirements,’” he said. “They’ve got agenda items, too, that will be well chosen [and] are things that we are not going to want to concede.”

For the past eight years, Leslie Schweitzer, a senior trade adviser to the U.S. Chamber of Commerce, and her Chamber-affiliated organization, TradeRoots, have been making the rounds in communities to promote NAFTA. She is primed to take on Obama’s promise to review the pact.

“We are fully prepared to attack this head-on after the first of the year if in fact that scenario proves to be true,” she said.

About 50 local chambers participated when the program began. That number has grown to 400 in preparation for the day Obama pursues his trade agenda. Schweitzer acknowledges deteriorating support of free trade and said she fears that the situation will only worsen if the Senator’s pledge forces the U.S. into taking a “timeout on trade.”

“We will fight very hard against that,” she said. “The American consumer and businessperson cannot afford to take a timeout on trade, nor can our trading partners around the world.”

So far, Schweitzer’s organization has targeted 80 Congressional districts to persuade voters to support NAFTA. More districts could be added depending on what Obama does if elected.

“We will ramp our efforts up even more across the country because this is where we win this — in the small towns around the country and the cities outside of Washington,” she said. “We have momentum, a momentum that we have built through all of the trade agreements that we’ve had over the course of the last several years.”

Still, Obama’s vow to retool NAFTA has support from leading Congressional Democrats, including House Ways and Means Subcommittee on Trade Chairman Sander Levin (Mich.), who feel that the pact has not kept up with the times.

“In a sense, NAFTA is outdated,” Levin said. “The structure of trade has changed dramatically over the last 15 years. It used to be that competition was among the U.S., the European Union and Japan. Now, it’s dramatically changed. Now you have other countries that have every different [trade] structures. … Conditions have changed, so policies have to change.”

Obama’s pledge does not necessarily mean a timeout on trade negotiations. Robert Shapiro, who served as undersecretary of Commerce for economic affairs during the Clinton administration, argues that reviewing the pact and moving ahead on other trade deals can happen simultaneously.

“They’re talking about revising NAFTA, but there are lots of ways you can go about this in terms of additional side agreements,” he said. “It does not have to be opened up so that it would be subject to another up-or-down vote in the Senate.”

Meanwhile, Obama will be operating in a public-opinion environment that is partly of his own making. Attacks on NAFTA and free trade in general by both Obama and his former rival, Sen. Hillary Rodham Clinton (D-N.Y.), appear to have resonated with voters already feeling the pinch of an economic slowdown, if not outright recession. A recent CNN/Opinion Research Corp. poll found that for the first time, a majority of Americans — 51 percent — consider foreign trade a threat to the U.S. economy.

“George Bush has pursued policies that don’t work for working Americans,” Obama said at an April 14 forum on trade and manufacturing in Pittsburgh. “In recent years, we’ve seen more than 3 million high-quality manufacturing jobs disappear, and more than 40,000 factories close down.”

In reality, it’s hard to tell whether trade helps or hurts the job market. Since NAFTA’s enactment in 1993, more than 25 million jobs have been created. But countless economic variables are at play, and trade may not be near the top in importance.

“Not everybody agrees about the job loss,” Reinsch said. “Economists will probably argue for the next 50 years over what the net [job loss] is. For every study that the left can come up with that shows job losses, the right can come up with one that shows job gains.”

Whether public support for expanding trade can be returned to its previous levels is unknown. It’s a bet that presumptive Republican presidential nominee Sen. John McCain (Ariz.) has essentially made by making clear his support for free trade. Shapiro said the answer to reviving public attitudes will come from job creation, but that is a tall order. The U.S. economy has shed jobs for seven straight months, and the recovery since the 2001 recession has produced 6 million jobs — a paltry sum compared to the 22 million created after the economic downturn in the early 1990s.

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