Class, Community and NAFTA
In early September, 300 of the
heaviest hitters in the econom-
ics profession signed an open
letter urging the passage of the
North American Free Trade
Agreement (NAFTA) by Congress.
The New York Times welcomed the
economists into the fray with the
front-page, debate-closing headline
“A Primer: Why Economists Favor
the Free-Trade Agreement.”
The story beneath the headline,
by economics reporter Sylvia
Nasar, began with great anticipa-
tion: “When economists of every
stripe agree on anything, it is note-
worthy.” The remainder of the arti-
cle was like a pin in a balloon. “An
arsenal of theories and models,”
wrote Nasar, “supports the conclu-
sion that the trade agreement
would have a minor impact on the
United States.” As for the central
issue in the U.S. debate-the effect
the agreement would have on the
number of U.S. jobs created or
destroyed-the economists predict-
ed the effect would be slight at
best. NAFTA, they said, would be
neither a windfall nor a disaster.
So what’s at stake here? Why the
letter? Why the headline? Nasar
concludes it must be the econo-
mists’ concern for Mexico. They
believe, she wrote, that “opening
the U.S. market would strengthen
the hand of a pro-American, pro-
free market government in Mexico
and help Mexico’s citizens.” Nasar
has identified the concern, but her
spin is just a little bit off. The
economists are not closing ranks to
defend Mexico, but to defend their
professional property: the idea of
free trade. In the debates over
NAFTA, the “special interests”
and the “demagogues” may tell tall
tales about the agreement’s dire
effects, but straightforward eco-
nomic logic, they say, has always
been on the side of free trade and
free markets. The political battle
may be raging, but the real debate
has long been closed. And that’s
worth writing a letter-and a head-
line-about.
Seen through the prism of class,
of course, free trade takes on a few
extra nuances. North American
workers have already-for better
or worse-been uprooted by the
rapid cross-border mobility of cap-
ital. This mobility has been pro-
ducing an international and
increasingly casual workforce
loosened from its local and nation-
al moorings. And since labor is one
of the anchors of social life, casual
labor has tended to produce a casu-
al basis of social existence. When
labor is “available”-read desper-
ate and willing-we may have
reached the ideal point for eco-
nomic theory: individuals, unen-
cumbered by tradition or govern-
ment regulation, selling their abili-
ty to work on perfectly free mar-
kets. But we have reached an
untenable juncture for social-and
in the long run, economic-prac-
tice. People live in communities, in
social arrangements. Trade must be
an extension of another set of
social relations. Economic integra-
tion inevitably brings with it an
international set of social arrange-
ments. Any agreement must take
those arrangements into account.
Trade union and Left critics of
NAFTA have argued for a trade
agreement that would take into
account not only the number of
jobs, but the kinds of jobs, the
security of jobs, the rights inherent
in jobs, and the nature of the rela-
tionship between employer and
employee. Most, like labor analyst
Harley Shaiken, have argued for a
“social charter” that would institu-
tionalize worker and union rights
as “the foundation of further eco-
nomic integration in the Western
Hemisphere.” A “good” agree-
ment, say Mexican political scien-
tists Jorge Castafieda and Carlos
Heredia-and much of the opposi-
tion in Canada, Mexico and the
United States-would subsidize
adjustment costs in all three coun-
tries, especially the retraining and
employment of displaced workers.
In doing so, it would attempt to
harmonize standards upward, in
part by establishing a common reg-
ulatory framework. It would deal
fairly and even-handedly with the
difficult issue of worker migration.
It would encourage long-term
national planning and open, demo-
cratic dispute resolution. Castafieda
and Heredia would have the
agreement foster a “European
Community-style social-market
economy” over the present model
of free-market “Anglo-Saxon
neoliberalism.”
NAFTA, as currently writ-
ten, would allow each
country’s historically ne-
gotiated rights and regulations to
be overridden by a secretly negoti-
ated agreement among all three
countries. However inadequate
those rights and regulations may
be, their erosion by NAFTA would
leave large networks of social-
and environmental-protection at
risk.
When all is said and done, it may
be the economists who are telling
the tall tales. The poet-farmer
Wendell Berry says the argument
over free trade “is between people
who belong to communities that
they wish to preserve, and people
who belong to no community and
who therefore are willing and
ready to destroy any community
that gets in their way.” That’s as
good a point of departure as any
for the trade debates that still lie
ahead.
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