Trade Protection: a Strategy for Giving Up

GEORGE F. WILL

October 15, 1992|By GEORGE F. WILL

WASHINGTON — Washington. --

The fact that the North American Free Trade Agreement has caused Bill Clinton anxiety indicates why he causes anxiety: Some of his better instincts seem to flicker like candles in the wind when they conflict with the strong, steady appetites of some of his constituencies. Still, his endorsement of NAFTA -- grudging and guarded though it was, and not for the right reasons -- is a mildly encouraging portent of the probable Clinton presidency.

It is said that the free-trade pact will, if ratified, create the world's largest common market, encompassing 365 million consumers, 20 million more than the European Community. But it will not really be like the common market that now extends from Maine to California. NAFTA is not nearly as good as it's cracked up to be by its supporters because it is not what it is said to be.

It is not really a free-trade agreement. In fact, a 2,000-page free-trade agreement is a contradiction in terms. Twenty paragraphs would suffice to establish really free trade, which does not require armies of bureaucrats to enforce the hair-splittings of legions of lawyers.

NAFTA reduces many trade barriers, but, in effect, moves others outward, to serve as ramparts around Mexico, Canada and the United States. Consider, for example, the ''rules of origin'' regulating domestic-content requirements of goods defined as ''North American.'' The rules include this triple niggle regarding textiles: North American yarn must be used in fabrics made in North America for clothes cut in North America.

NAFTA creates a regional bloc to rival, and impede, the exporting Pacific Rim nations. Many of the 2,000 pages, properly deciphered, record U.S., Canadian and Mexican jockeying to protect particular industries and interests.

But NAFTA is progress. Today Mexican tariffs are, on average, 2 1/2 times higher than U.S. tariffs. The export market is the largest source of new U.S. jobs. (Mr. Clinton's support for NAFTA may have less to do with a philosophy of freedom than with a political calculation: Michigan, Ohio and Illinois are among the 10 states selling most to Mexico.) NAFTA will quickly mean cheaper and more plentiful fruits and vegetables, products currently subject to tariffs protecting U.S. farmers.

NAFTA will, after a 15-year phase-in, further link the commercial lives of three nations that already have huge trade flows with each other. Critics of NAFTA cite the disparities of development between the U.S. and Mexico, with its population of 85 million (four times that of Canada). They fear the flow southward of low-skill jobs.

But the Mexican economy is just one-twentieth the size of the U.S. economy, and the Bush administration guesses that the increased bilateral trade would increase U.S. GNP only slightly. Ross Perot, the timidest Texan, quakes about the menace of Mexico, saying NAFTA would apply ''a giant sucking-sound vacuum on what used to be industrial America.''

NAFTA is especially important in forcing people to define their stance toward the future. Are they too timid about change? Are they too confident they can discern the shape of the future?

Recent administration testimony supporting NAFTA resulted in this cockamamie headline:

''Trade Pact Could Cost Up to 150,000 U.S. Jobs''

The administration also says there would be 325,000 new jobs created in the first five years, a net gain of 175,000.

But stay with the idea of ''lost jobs.'' If the mentality common among NAFTA's liberal critics had prevailed when the automobile industry was in its infancy, government might have strangled the infant in its cradle -- in the name of ''compassion,'' of course.

The Richard Gephardts of that day would have said: Pity the poor tanners, harness-makers, buggy and buggy-whip manufacturers, livery-stable operators, blacksmiths -- woe! Jobs ''lost'' to the horseless carriage. The Al Gores of that day would have warned that the internal combustion engine would spoil the urban air -- air then perfumed by 3 million horses, each producing upward of 20 pounds of manure a day, manure that attracted swarms of flies until it was ground by traffic into a dust that covered clothes and furniture and coated nostrils.

Freer trade means faster change, and Mr. Clinton has spent his adult life courting groups, especially labor groups, that want activist government to preserve the status quo. A President Clinton and a Democratic Congress could have a grand time using NAFTA as an excuse for spending and regulating (called ''transition strategies'') to help those hurt by freer trade, and those who think they are entitled to compensation for any inconvenience of change.

But if Mr. Clinton gets to the White House he should hew to the most sensible sentiment he uttered on the way there: ''Protectionism is just a fancy word for giving up.''

George F. Will is a syndicated columnist.

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