Open NAFTA and lose America’s #1 Energy Provider
During the final Democratic candidates’ debate before the Ohio and Texas primaries, Senators Hillary Clinton and Barack Obama both recently committed to renegotiating NAFTA or revoke the treaty altogether. While Clinton guaranteed voters that she was confident a Clinton presidency would result in successful negotiations, Obama did not offer such a strong guarantee of success, thus leaving a real possibility that the end of NAFTA could in fact occur. But are such threats sincere? The Canadian embassy in Washington and Obama’s campaign denied a CTV (Canadian Television) report that Austen Goolsbee, a senior adviser for the Illinois Senator, called the Canadian Ambassador, Michael Wilson, within the past month to let him know that Mr. Obama would be criticizing NAFTA, but that it was “just campaign rhetoric.” Merely campaign rhetoric, or not, making it a campaign guarantee is enough to warn voters about the disaster even renegotiation would result.
Clinton and Obama have been criticized for their position from notable Republicans such as President Bush and the presumptive GOP nominee, Senator John McCain. Bush focused his attacks on the growth of all member states economies under NAFTA. In a press conference on February 28, Bush noted that the agreement “has meant prosperity on both sides of our borders, north and south. And I believe it’s in the interests to continue to seek markets for our farmers, ranchers and businesspeople.” The President then urged the Congress to pass the free trade agreement with Colombia that is current being considered. Senator McCain’s focus was on the jeopardizing of military support, noting that the American and Canadian trade and national security efforts are “interconnected with each other.” Valid points, both. However, NAFTA supporters have yet to point out the bigger problems associated with opening negotiations on the treaty or worse still, scrapping it altogether.
Surely it is the case that when presidential candidates list as a priority the desire to lessen their dependence on foreign energy sources, it is clear they do not mean making it possible for foreign governments to deny selling the resource to them. But if NAFTA is opened up for renegotiations, easy and guaranteed access to oil could be limited or worse still denied. Canada is the number one source of oil for the United States, not Saudi Arabia, Kuwait or Venezuela. Oil shipments from Canada to the U.S. averaged 1.86 million barrels a day in 2007. Saudi Arabia was a distant second, shipping on average 1.46 million barrels each day. Canada is not only the largest source of energy for the United States. As the Canadian Trade Minister, David Emerson, noted Canada is also the most stable supplier of energy imports to the United States.
The potential loss of access to oil is not the only thing the American presidential hopefuls should be weary about. If the Democrats open up NAFTA for renegotiation, the Canadians and Mexicans will also have some issues to renegotiate. The dispute-resolution mechanism is the number one gripe of NAFTA for Canadians. Most arbitrations using the NAFTA mechanisms have been decided in favor of the U.S. much to the anger of the Canadian Government for years. The Mexican government may also have a thing or two to complain about. The Democratic presidential hopefuls must understand that NAFTA is not a one-way street and no one seems to be pointing that out. Nor has there been enough emphasis on the fact that NAFTA is not causing the problems with which the voters of Ohio are really concerned.
In the last five years, Ohio has lost 180 000 jobs. However, Derek Burney, the former Canadian Ambassador to the United States, has recently pointed out in a piece written for The Globe and Mail that those who have lost jobs in Ohio have not lost them to Canada or Mexico but rather China and India. Furthermore, there have been positives in the Ohio economy, arguably, as a result of NAFTA. The jobless rate in the state has actually gone down since the 1994 levels, factory output has grown, and exports have gone up 10% every year since the deal was signed.
When deciding who will be the next President in November, voters need to consider the importance of NAFTA and the damage revoking it would do to not only the American economy but that of the entire North America. There has been a gain of 25 million jobs in the United States since 1993. The Canadian economy grew an average 4.1% each year under NAFTA, the American economy 3.8% and Mexico, 3.5%. North American economies share a common challenge from global competition, one that can be slightly mitigated because “NAFTA offers a singular bulwark” in trying to maintain its stance amongst such competition. This argument was used by Al Gore in a debate against Ross Perot. Burney suggests that maybe Mr. Gore would like to “share this ‘inconvenient truth’ with his fellow Democrats.”