One of our readers pointed me to a recent panel discussion at the Institute for Policy Innovation on "Where the Candidates Stand on Trade." It was quite good, I thought. Here are some excerpts, but it's worth skimming through the whole thing, including the Q & A at the end.
Doug Holtz-Eakin (McCain)
Demonizing trade agreements is a bad economic policy, it’s bad foreign policy. The recent attempts to point to NAFTA as the source of grave difficulties in the U.S. manufacturing sector is at odds with any reputable study of the impact of that trade agreement on the United States, Canada, and Mexico.
Dan Tarullo (Obama)
[Obama] does believe in trade as an important component of a market-based economy that
can produce economic growth in a strong, sustained, and shared fashion....
what he wants to do is to shift trade policy and to shift it in accordance with the way in which he approaches these trade issues. Because the first thing I think one needs to understand is that the issue of trade or not is not a binary issue, it’s not as simple as people indicate.
...
To the degree that trade agreements are serving as an impediment to reasonable regulation in the public interest by all parties to trade agreements, there’s a problem, and I leave it to you to divine how some of those provisions got in there in the first place.
So, again, for Obama, yes, trade, open markets, globalization. But you need to look to what’s actually in those agreements, what their effects are on people.
Gary Gensler (Clinton)
In terms of NAFTA, she feels strongly that there should be some changes to that, and she has a very specific plan. One is to sit down with the Canadians and the Mexicans and try to get the labor and environmental standards embedded into the core agreement. And when we talk about labor and environmental standards, we know what a package of labor and environmental standards were acceptable to Senator Clinton in the Peru agreement.
We know that those are not really reaching that far, and she’s very hopeful that both the Mexicans and Canadians would want to comply with the major International Labor Organization agreements.
...
Same with the environmental standards. ...
Secondly, the investment standards. I think Dan mentioned this in one regard, but to change NAFTA’s investment provisions that grant special rights for foreign companies to in essence go, in an extraterritorial way, go to the tribunals rather than relying on the courts.
During the Q & A, Bob Davis of The Wall Street Journal followed up with a question about investment:
... you talked about the investment provisions, which were inserted at the insistence of the U.S. because Mexico has a corrupt legal system. So are you saying that the U.S. should abandon those, or should push for the elimination of those provisions, which would then open U.S. companies to having to go through Mexican courts?
Gary Gensler (Clinton)
And the way that the investment standards have been used by other countries’ companies has sort of avoided going into our court systems and where our laws can be applied, so she does feel that we’ve gotta – when we sit down and try to renegotiate and try to address and get to a better place than where we are.
