Short-Term Pain, Long-Term Gain

TRB

September 16, 1993|By TRB

Washington. -- The politics of trade are a paradigm of America's general political dilemma. They illustrate why ''change,'' though we all claim to want it, is so hard to come by.

There is no doubt that free trade is a net benefit for the country as a whole. But there is also no doubt that it hurts certain individuals. Unfortunately the benefits are spread among the general population and often hard to identify specifically, while the harm is concentrated on a few identifiable -- and politically organized -- interests.

The person who will get a job because of the North American Free Trade Agreement isn't even aware of it yet; the person who may lose a job because of it is all too aware. The millions who will enjoy cheaper food and clothing thanks to NAFTA aren't lobbying for it; but the farming and textile interests that will face new competition are lobbying against it.

The agreement benefit Americans in two ways. Yes, it will create jobs -- more jobs than it eliminates -- by building a bigger market in Mexico for American products. But giving Americans access to cheaper Mexican products is also a plus, not a minus.

The debate over how low Mexican wages really are misses the point. The lower they are, the better deal this is for America. In importing Mexican products we are, after all, buying Mexican labor. The less we pay, the bigger the bargain. (And opponents of NAFTA should spare us their crocodile tears for the Mexicans who take these low-wage jobs, since the alternative they are offering is even lower wages -- or unemployment.)

The people of the United States cannot grow richer by paying ourselves $16 an hour for work foreigners are willing to do for us for just $3. Attempting this trick is to abandon economics for alchemy. But when a $16-an-hour American loses his job to a $3-an-hour Mexican -- and it will happen under NAFTA, though not nearly as often as opponents charge -- it's only fair that some of society's savings be used to cushion the blow for that person, and retrain him or her for work that's actually worth $16 an hour.

The Congressional Budget Office estimates that NAFTA will increase the U.S. gross domestic product by a measly quarter of one percent. But even that is nothing to sneeze at -- $15 or $20 billion a year. Spending some of that money on NAFTA's losers seems only fair. And if it greased the wheels of the deal by changing the minds of a few opponents, it would enable everybody to come out ahead.

TRB is a column of The New Republic, written by Michael Kinsley.

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