Reich on NAFTA

Robert Reich has a good post on NAFTA and the dilemmas of trade policy more generally. His main argument is a bit hard to summarize and not very long, so I'd suggest you read it yourself. I'll just quote the newsworthy bit where he offers his recollection of where Hillary Clinton stood on NAFTA during her husband's presidency:

The answer is HRC didn't want the Administration to move forward with NAFTA, but not because she was opposed to NAFTA as a policy. She opposed NAFTA because of its timing. She wanted her health-care plan to be voted on first. She feared that the fight over NAFTA would use up so much of the White House's political capital that there wouldn't be enough left when it came to pushing for health care. In retrospect, she was probably right.

That seems reasonable enough. Another way of looking at it that's less dependent on the precise issues of timing is simply that the Clinton administration got scandalously little from the business community in exchange for supporting things like NAFTA. Whatever the order of operations, you would hope that in the future if a Democratic administration winds up bucking its labor allies to pass a business priority on trade policy, that some kind of guarantees are forthcoming that groups that benefit from the deal will deliver some moderate Republicans to cast tough budget votes or to participate constructively in health care legislation.

Comments

So she opposed NAFTA out of purely selfish reasons? What a shocker!! I don't know what it will take to get people to realize how selfish and narcissistic both Bill and Hillary are. Didn't they way they chose to run the DNC give people hints? Or the reasons why Hillary won't release her tax returns now?

Posted by Joe Klein's conscience | March 3, 2008 9:30 AM

So she opposed NAFTA out of purely selfish reasons?

I can't see "I'd rather pass universal health care" as a purely selfish reason.

Posted by Matt Weiner | March 3, 2008 9:35 AM

And in line with Matt's post, I'd say that order of operations matters. If you're hoping for the business community to deliver some moderate Republicans in exchange for something, get payment up front -- it's not clear that there are any in stock.

Posted by Matt Weiner | March 3, 2008 9:38 AM

Matt Weiner:
I made one mistake in my original response. Looking back on it now it sure looks selfish. While I don't know many people at the beginning of Bill Clinton's presidency that thought that one day Hillary would run, by the end of his presidency it sure looked like she had that in mind one day(to outside the Beltway people). What it tells me(with 20/20 hindsight obviously) is that she wanted to push health care reform through so she could claim that as a crowning accomplishment. Something she wishes she could tout now as why she is worthy of being president. As we all know, it didn't pan out then and it isn't panning out now.

Posted by Joe Klein's conscience | March 3, 2008 9:44 AM

you would hope that in the future if a Democratic administration winds up bucking its labor allies to pass a business priority on trade policy, that some kind of guarantees are forthcoming that groups that benefit from the deal will deliver some moderate Republicans to cast tough budget votes or to participate constructively in health care legislation

Or we could hope for a future administration that doesn't fuck over labor to please its corporate backers. The political world simply doesn't operate the way you're imagining it does here: if you give away the farm on NAFTA to big business, big business is happy, but owes you nothing; it's not like the insurance industry, which had every incentive to tank the Clinton health care plan, was going to hold back on doing so out of gratitude for the way NAFTA helped some auto manufacturer find cheap labor in Mexico.

Posted by Christmas | March 3, 2008 9:44 AM

Christmas:
Your comment brings up a good question. Why does labor still bend over for the Clinton's(or a number of the other Dems) who helped gut labor's power? Is it because 3rd parties are not viable really? Do they like gettting fools of(or do they have no shame)?

Posted by Joe Klein's conscience | March 3, 2008 9:50 AM

There seems to be rather a common pattern throughout my entire life of Democrats and somewhat "liberals" bending over backward to either press for the right's agenda or somehow help it along and then being shocked that they're never rewarded for it, and in fact often punished by those they just helped out.

There may be another dynamic of the 90's though which involves the Republicans and the big business community knowing how close they were to taking power. Why follow through and reward useful Democrats when you can blow them off in order to get the real thing, i.e., a dozen years of a Congressional Republican majority crowned by absolute Republican control of all branches of government.

And there's another dynamic of those times, which is that any of us crazy or fringe-y liberals who suggested that the Big-Biz pushers of, say, NAFTA, would never politically repay their agenda's successful pushing by Bill Clinton or any other Democrats -- well, we would have been called crazy, irrational, lefty fringe-y liberals who don't understand how politics work.

Posted by El Cid | March 3, 2008 9:56 AM

How does preferring to do something first translate into "oppose"? It doesn't, of course, unless your first language is Limbaugh.

Posted by Jeffrey Davis | March 3, 2008 9:59 AM

I think Clinton's position on NAFTA in 93 seems a clearly reasonable one, and it's rather unfair to characterize it as "purely selfish."

At the same time, this rather makes Mickey Kantor, et al's, efforts to make Clinton into a NAFTA opponent look pretty misleading.

Posted by John | March 3, 2008 10:00 AM

Both candidates are neoliberals. Hillary Clinton at least recognized that preventing bodily suffering was more important that decreasing "inefficiencies" in moving manufacturing plants between countries. That's something.

Obama's chief economic adviser, U Chicago economist Austan Goolsbee, apparently really did tell the Canadians, in a frickin' printed memo, that Obama didn't mean what he was saying about NAFTA:

this messaging should not be taken out of context and should be viewed as more about political positioning than a clear articulation of policy plans (TPM report)

Don't worry, corporate interests! Those stupid people with their stupid desire for economic security for their families and communities - we're playing them for chumps, not actually taking their concerns seriously.

Posted by DivGuy | March 3, 2008 10:06 AM

Christmas and others, did you actually read Reich's post? Reich, who no one could accuse of being a lackey for the right, says that trade is not the problem. There are other policies we should implement to help those who are disproportionately affected by trade, the benefits of which on the whole far outweigh the costs.

With re Clinton and her priorities, on the one hand, you could easily see her point re timing and priorities. On the other, given how she handled herself during the healthcare fiasco (and the latter part of this campaign, for that matter), it is hard not to think that ego and self-promotion didn't play at least a little bit of a role in her position.

Posted by Chunche | March 3, 2008 10:10 AM

the Clinton administration got scandalously little from the business community in exchange for supporting things like NAFTA

Maybe possibly it wasn't happenstance that the "business community" got to the front of the line while Slick Willy & Crew were in charge?

Posted by sglover | March 3, 2008 10:13 AM

Krugman says the same thing, that making NAFTA a higher priority wasted Clinton's chances for passing Hillary Care. I thought the same thing at the time. Maybe I'm interpreting the comment too literally, but I don't think Hillary Clinton was selfish for wanting health care reform more than NAFTA. It should have been, 'Okay Wall Street and big business, we'll get you your NAFTA, but only if you help us pass health care reform'.

Posted by Gary Sugar | March 3, 2008 10:19 AM

Turns out Goolsbee and the Obama campaign were flat out lying about their position on NAFTA.

Posted by Petey | March 3, 2008 10:19 AM

Matt puts his finger on why I reject things like NAFTA. It isn't because I oppose free trade treaties in principle.

It is rather that you would think that you could make a straightforward compromise: free trade for corporations in exchange for support for a welfare and educational net to help those displaced by the effects of the treaty.

This is what Matt, Brad DeLong et al always say is much better than the alternative of putting regulations into the treaty.

But that compromise NEVER HAPPENS. Corporations never support the strengthening of the safety net or re-education initiatives. Corporations know they can take their end of the bargain and run with it.

So, why are we such suckers?

Posted by PTS | March 3, 2008 10:35 AM

Guarantees from the business community that they won't fight legislation that they perceive as against their interests? Worthless. Perhaps it would have been easier to pass health care if it had been tried before NAFTA. Probably not. At that point in time businesses didn't perceive any strong incentive to back reform. Times have changed and that's why there is any chance of passing health care reform during the next 4 years not because of any guarantee the next President will get.

Posted by Ron | March 3, 2008 10:37 AM

I agree with Ron. It is not that there are never any quid pro quos in Washington. Of course, there are. But the perceived potential benefits of NAFTA to the business community did not come close to the perceived potential cost of universal health care. They would have never made such a bargain.

Today, the calculus on health care has shifted somewhat for the business community and, more importantly, shifted a fair amount for the public as a whole. That makes it a more hospitable climate. At least, I hope that is the case.

Posted by Chunche | March 3, 2008 10:50 AM

Christmas,

On the question of why labor is still willing to deal with the Clinton's and other pro-corporate trade supporters: I think a lot of it has to do with the nature of Labor as a coalition, and the vision (or lack thereof) or many of the leaders of labor unions.

Although Labor ideally "has no permanent friends, only permanent interests," it's important to remember that one of the permanent interests of Institutional Labor is maintaining the viability of the AFL-CIO as a coalition; and, from the perspective of each International's President, maintaining the viability of his (and it is almost always his) union, independently and within the coalition.

Sometimes the consensus choice, for a leader or for a political endorsement, is the answer to the question, "who/what is least likely to encroach on my turf or mess with my particular plans, or to upset our organization/coalition?" The cost of fighting to get the group to agree to the best option is often not worth it, from this perspective, compared to the much lower cost of getting easy agreement on a somewhat acceptable but far inferior option.

Some leaders probably don't care much about the issue of trade, or possibly even about Labor as a social movement at all (that is, they still do see it through business unionist eyes). Others just don't think they can/want to risk the fight necessary to oppose a sitting Dem president who's crappy on trade and other key issues, or to oppose the candidate running under his banner with the support of his old team of advisors, and who incidentally has the support of a lot of actual union members.

And others might recognize that the Dem establishment support "free trade" pretty wholeheartedly, and have resigned themselves to leaving this issue aside until they can build the strength to take it on.

Posted by Pesto | March 3, 2008 10:54 AM

Are we really crediting an anonymous Canadian consular official's characterization of Goolsbee's remarks as definitive? Goolsbee's own description of the conversation seems like it could be characterized in that way, but only by a somewhat dishonest interlocuter who is trying to give the wrong impression.

Beyond that, isn't it kind of outrageous that internal Canadian foreign ministry documents are being leaked to the press in an attempt to influence US elections? Since when is that okay? A foreign government is trying to influence our elections. This is shameful.

Posted by John | March 3, 2008 11:16 AM

Sometimes the consensus choice, for a leader or for a political endorsement, is the answer to the question, "who/what is least likely to encroach on my turf or mess with my particular plans, or to upset our organization/coalition?" The cost of fighting to get the group to agree to the best option is often not worth it, from this perspective, compared to the much lower cost of getting easy agreement on a somewhat acceptable but far inferior option.

Based on the soporific windiness and complete lack of content in the above paragraph, Pesto, I'm guessing you're in the business of management consulting. Am I right?

Posted by James Gary | March 3, 2008 11:23 AM

Reich recollection crystalizes something for me that I've seen in countless discussions of the primaries but hadn't quite identified:

A lot of liberal anger towards NAFTA is less on the merits, and more along the lines of "Clinton gave us NAFTA but not UHC." Whatever the merits of NAFTA, it clearly hasn't advanced liberal interests, tactically or strategically. Whereas, obviously, UHC in 1993 would have been a huge victory.

So saying, "Don't bash NAFTA, liberals, it isn't the sole cause of job loss in Ohio" is kind of beside the point. Getting vitamins instead of a flu shot may not have made you sick, but it sure didn't help.

PS - John, in a court of law, the person with the contemporaneous written record wins every time. The credibility lies with the Canadian consul, not Goolsbee. The fact that you like Obama doesn't actually change that.

Posted by JRoth | March 3, 2008 11:30 AM

Turns out Goolsbee and the Obama campaign were flat out lying about their position on NAFTA.

We never met with the Canadians! There was no meeting!

OK, never mind our prior spin, there was a meeting, but what they said about it isn't an accurate paraphrase of what we said!

So saith the Messiah.

Posted by Al | March 3, 2008 11:38 AM

"Beyond that, isn't it kind of outrageous that internal Canadian foreign ministry documents are being leaked to the press"

I'd say that it's far more outrageous that Obama would lie to the electorate about his NAFTA policy, and when caught, the Obama campaign would spend a week lying about the original lie.

In the hierarchy of outrageousness, that strikes me as far more outrageous than the fact that the Canadian government leaks.

Obama should apologize, and Goolsbee should be fired.

Posted by Petey | March 3, 2008 11:39 AM

BTW - gotta love Goolsbee's prior comment: "It is a totally inaccurate story ... I did not call these people..."

Yeah, he did not "call" these people - because he spoke with them in person. Goolsbee, you sly dog.

Posted by Al | March 3, 2008 11:43 AM

"I'd say that it's far more outrageous that Obama would lie to the electorate about his NAFTA policy, and when caught, the Obama campaign would spend a week lying about the original lie."

So now the definition of "lying" is taking a different side from a diplomat in a he said/she said account of a conversation? And such "lies" are a firing offense?

That's a very interesting position for a Clinton supporter to take.

Posted by LaFollette Progressive | March 3, 2008 11:48 AM

Many of these comments show a lack of understanding by the Left of "corporations" or "the business community". Namely, there is the common assumption on the Left that there is some such community acting in concert, deciding issue by issue what to support and what not. Of course, as my straw man shows, such a community does not exist.

Instead, each industry, and even each company and each executive, tries to figure out what is best for itself. So, as Christmas points out, since NAFTA didn't do squat for the health insurance industry, they had no reason not to oppose what they perceived to be a serious threat to their bottom line.

That said, I do not think that it is correct that President Clinton won nothing by being perceived as being more pro-business. You can look at both the financial support the Democratic party has received from business and their current ability to court upper-income voters as growing out of their willingness to tow a more pro-business line.

Posted by Vermando | March 3, 2008 11:49 AM

DivGuy 10:06am - Did you read your TPM link? Goolsbee did not write the memo; the Canadian diplomat wrote it based on his recollection of the oral convo.

JRoth 11:30am - I think you're right that the memo would get a hearsay exception under the rules of evidence as a "public record". However, practically speaking, I think the Canadian dip, who optimistically wants to report that Obama will be good for Canada, has just as much motive to shade the terms of the conversation as Goolsbee does.

Posted by nbt | March 3, 2008 11:53 AM

who optimistically wants to report that Obama will be good for Canada

This seems wrong. The Canadian diplomat would have in interest in giving the home office accurate information. After all, what's the use of having a diplomat provide inaccurate information?

Posted by Al | March 3, 2008 12:03 PM

No, James, you're completely wrong.

I'm speaking as a former staffer for a couple of unions(organizer and staff representative for about 7 years). I want to make it clear that I'm not in any way endorsing that way of making decisions. I think it sucks. I'm just describing why decisions get made that way. The best examples of this that I can come up with are Central Labor Councils, where locally powerful unions seem to like reaching a consensus on electing the person least likely to make them actually do anything.

Posted by Pesto | March 3, 2008 12:04 PM

I thought Bill got quite a bit of support from high tech, intellectual-property intensive businesses, which really benefited from NAFTA. But he got nothing from other businesses and substantially less than nothing from Insurance.

Regardless, corporations are not legislators and they shouldn't have the power to horse trade like one. They approached that level of power at the apex of the K Street Project, and that was a bad thing, remember?

Posted by Aatos | March 3, 2008 12:13 PM

If you read the memo obtained by the AP, skipping over how the Canadian characterized the politics, the specific statement of what Obama was saying is completely consistent with his public statements:

"On NAFTA, Goolsbee suggested that Obama is less about fundamentally changing the agreement and more in favour of strengthening/clarifying language on labour mobility and environment and trying to establish these as more 'core' principles of the agreement."

How is this different from his public position?

Posted by bemused | March 3, 2008 12:35 PM

Actually, take that one step farther, it is remarkable how little effort the business community put into fighting for NAFTA. As a low level staffer what I saw was Clinton pouring his political capital into NAFTA, and the business community standing back and letting Clinton take all the hits.

But NAFTA wasn't the big deal in killing universal health care, really it was the budget deal and BTU tax that used up all the political capital.

Posted by CalDem | March 3, 2008 12:40 PM

How does Robert Reich have any credibility on this considering he has endorsed Barack Obama? He can't then be cited as some independent observer for the purposes of health care and NAFTA.

David Gergen, who is neutral and was has worked for both Democrats and Republicans, has a very different recollection.

Posted by Tim K | March 3, 2008 1:45 PM

Actually, take that one step farther, it is remarkable how little effort the business community put into fighting for NAFTA. As a low level staffer what I saw was Clinton pouring his political capital into NAFTA, and the business community standing back and letting Clinton take all the hits.

While it's true that of course the business community (and in particular its more internationalist examples seeking to export manufacturing) were happy to let the Clinton / Gore administration take on as much of the NAFTA lobbying as they could allow, it should not be assumed that from their own point of view (as opposed to the view within the Clinton administration), they were holding back.

Business Lobbying for Trade Pact Appears to Sway Few in Congress

By JOSHUA MILLS, New York Times, November 12, 1993

Sputtering for months, the business community's lobbying campaign is now running wide open, producing mailings, telephone calls, newspaper advertisements and speeches on behalf of the North American Free Trade Agreement. Hundreds of business executives are spending more time on Capitol Hill than at home, and hundreds of factory workers are being pulled off the line to visit members of Congress.

"I think we've done more on Nafta than on any legislative issue in history," said Lawrence A. Bossidy, the chairman of Allied Signal Inc. and the head of USA-Nafta, an umbrella coalition of thousands of companies and trade organizations backing the pact...

...Big Business has not hesitated to haul out its heavy hitters. Representative Nita M. Lowey, an undecided Democrat whose district includes parts of Westchester County and New York City, ticked off the business leaders who had called on her recently -- John F. McGillicuddy, and John S. Reed, the chairmen of the Chemical Banking Corporation and Citicorp, respectively, and executives from Salomon Inc., Pepsico and I.B.M.

Given the muscle of big corporations, and the millions of dollars they have committed to the fray, it is no small frustration to executives -- and to President Clinton -- that the lobbying has not paid off more handsomely. Just how much money will be spent is unclear. USA-Nafta will not disclose its spending; business lobbyists and opponents of the agreement estimate the pro-Nafta spending at anywhere from $5 million to $30 million. "They've put a lot of money into it, but how effective it's been is hard to say," said Bill Cunningham, the trade lobbyist for the A.F.L.-C.I.O...

...Both Mr. Bossidy, the chairman of USA-Nafta, and Jerry R. Junkins, the chief executive of Texas Instruments Inc. and chairman of the the Business Roundtable's trade and investment group, said it was essential to wait for the side agreements because business needed the details of those agreements to lobby effectively. The early problems at USA-Nafta reflect the unfortunate selection of James D. Robinson 3d, then the chief executive of the American Express Company, and Kay R. Whitmore, his counterpart at the Eastman Kodak Company, as the first co-chairmen. Both men left their jobs under pressure this year...

But clearly the administration wanted more, given that there was an organized opposition from liberal and labor groups.

...Not enough, according to President Clinton and other Democrats. In a speech in New York late last month the President told business leaders: "Ask your employees who support this to contact their members of Congress. I've had as many Republican as Democratic members of Congress that I am lobbying say to me, 'I want to hear from the people who work for the employers, not just from the employers." If part of the problems of business is that the opposition made its case first, another is that legislators are finding some business claims hard to believe.

"I've had Nafta proponents come by and refuse to admit a single job loss from the agreement," said Representative Bob Inglis, a South Carolina Republican who is likely to oppose the pact. "It's somewhat farfetched to say there will not be a job loss. The labor-intensive operations seem likely to move to Mexico quickly."...

http://query.nytimes.com/gst/fullpage.html?res=9F0CE7D91E30F931A25752C1A965958260

Five days after the article appeared, NAFTA passed the House with 102 Democrats and 132 Republicans against 156 Democratic, 43 Republican, and 1 Independent dissenters.

http://clerk.house.gov/evs/1993/roll575.xml

Three days after that vote, NAFTA passed the Senate with 34 Republicans and 27 Democrats voting in favor against 10 Republicans and 28 Democrats in opposition.

http://books.google.com/books?id=Hf12VNRekqEC&pg=PA8&lpg=PA8&dq=nafta+senate+passed+democrats&source=web&ots=C9pS-CMJ1W&sig=W0Ybar1tv9GUJY-CRsK3Iri2dfs&hl=en

Posted by El Cid | March 3, 2008 2:09 PM

"And such "lies" are a firing offense? That's a very interesting position for a Clinton supporter to take."

Yes. It's a firing offense.

Just as Billy Shaheen's offense was a firing offense.

Team Clinton is willing to clean house when folks cross the line.

Team Obama prefers the Bush-like stonewall. And they don't seem to care if sticking with a subordinate who's crossed the line makes Obama into a liar on a core bit of economic policy.

(PS. Edwards supporters who've gone over to Obama are basically alright with me, even if they've chosen wrong on this particular choice.)

Posted by Petey | March 3, 2008 6:14 PM

"Creating a free trade zone in North America, the largest free trade zone in the world would expand U.S. exports, create jobs and ensure that our economy was reaping the benefits, not the burdens, of globalization. Although unpopular with labor unions, expanding trade opportunities was an important administration goal. The question was whether the White House could focus its energies on two legislative campaigns at once [NAFTA and health care]. I argued that we could and that postponing health care would further weaken its chances."

-- Hillary Clinton, Living History, 2003, p.182

Posted by Duncan Renaldo | March 4, 2008 7:12 AM

"Creating a free trade zone in North America, the largest free trade zone in the world would expand U.S. exports, create jobs and ensure that our economy was reaping the benefits, not the burdens, of globalization. Although unpopular with labor unions, expanding trade opportunities was an important administration goal. The question was whether the White House could focus its energies on two legislative campaigns at once [NAFTA and health care]. I argued that we could and that postponing health care would further weaken its chances."

-- Hillary Clinton, Living History, 2003, p.182

Posted by Duncan Renaldo | March 4, 2008 7:13 AM

"Creating a free trade zone in North America, the largest free trade zone in the world would expand U.S. exports, create jobs and ensure that our economy was reaping the benefits, not the burdens, of globalization. Although unpopular with labor unions, expanding trade opportunities was an important administration goal. The question was whether the White House could focus its energies on two legislative campaigns at once [NAFTA and health care]. I argued that we could and that postponing health care would further weaken its chances."

-- Hillary Clinton, Living History, 2003, p.182

Posted by Duncan Renaldo | March 4, 2008 7:14 AM

"Creating a free trade zone in North America, the largest free trade zone in the world would expand U.S. exports, create jobs and ensure that our economy was reaping the benefits, not the burdens, of globalization. Although unpopular with labor unions, expanding trade opportunities was an important administration goal. The question was whether the White House could focus its energies on two legislative campaigns at once [NAFTA and health care]. I argued that we could and that postponing health care would further weaken its chances."

-- Hillary Clinton, Living History, 2003, p.182

Posted by Duncan Renaldo | March 4, 2008 7:16 AM