The Protectionist Temptation

In all the range of rather intimate relations that we have with the United States, the economic tie, worked up by the North American Free Trade Agreement (NAFTA), is certainly the most significant tie in every day life for the majority of the Québécois. It is so, even though we are rarely conscious of it. It is without a doubt for this reason-–and this is not obvious-–that we show so little interest in it what, in the context of the current race for the president, circulates among our neighbors to the South about the agreements ruling commercial exchanges.

Anecdote.

The most oily banana peel on which Democrat Barck Obama has slipped, is a byproduct, so to speak, of the debate on opening of the borders for commercial means. To speak of “little towns” where the workers that are fired find comfort in “firearms, religion and hostility towards immigrants” indeed constitutes an attack obliquely directed against free exchange. (Furthermore, Obama has ventured on terrain that we know well; where they confront an urban opinion deemed enlightened and a Hérouxville-like blackness.

Whatever it may be, the fact is that Barack Obama, like Hillary Clinton, calls into question free exchange in general, and NAFTA in particular – for his part, the Republican candidate John McCain is resolutely a free-exchanger.

The two candidates for the Democratic nomination hope to renegotiate a three party accord uniting the United States, Canada and Mexico. And they profess it even more ardently now that the next round of primaries will take place, Tuesday, in Pennsylvania. This state has lost 200,000 employees in the manufacture sector since 2001, yet in spite of this it reported a GDP of $430 billion which would make it the seventeenth economic power in the world if it were a country!

Certainly, the protectionist temptation is always lively in Washington, particularly in Congress. And George W. Bush, theoretically having sold on opening, has regularly tried to keep or erect barriers in steel, textile, and agriculture.

However, without even mentioning the leak revealing that Obama’s speech on free exchange is strictly electoral, no one in the United States would believe that the future president, whoever it is, would take a protectionist view. In particular, in light of its partners in the North and South.

There are two reasons for this.

First, the American economy (just like the Canadian or Mexican economy) depends on its exchanges with foreigners: The United States counts on an annual inflow of $1600 billion from exportation; a third is sold to Canada and in Mexico. And on the other hand, two thirds, more or less, of the exportations from Canada and Mexico come to the United States.

Therefore, a ropening of NAFTA would not bring about a one-way process. Rather, “if the American government made an error by reopening NAFTA, of course we will also have things to negotiate,” the Prime Minister Stephen Harper has already indicated; Mexico would do as much.

All in all, the populist discourse of the candidates for the Democratic nomination (that the New York Times compared to that of the tribune of CNN, Lou Dobbs!) is not unlike that of the Liberal Party of Canada, which in 1988, and to a lesser extent in 1993, promised to destroy or to re-examine the agreement signed by the conservative Brian Mulroney.

Let us remember; the agreement entered into effect January 1st 1994….