Confession time: For the last few weeks we’ve seen it in the headlines and glazed over it. B-O-R-I-N-G, we said. But its presence in the news persisted and it became the subject of a he-said, she-said spat between Barack Obama and Hillary Clinton.
We couldn’t ignore it anymore…
We’re talking Nafta, the North American Free Trade Agreement. And before you get bored, realize it’s being talked about for good reason, because it plays a big role in our economy (the government estimates it adds up to $930 annually to the pockets of a family of four). Here’s the lowdown:
Nafta was signed in 1994
It was former President Bill Clinton’s administration that pushed Nafta through, making it less expensive to trade between Mexico, Canada and the United States. Nafta removed pricey tariffs on goods moved across these borders and was meant to stimulate trade. Some argue it has, others say it failed to protect U.S. jobs, which moved out of the country to cheaper locations.
Why is Nafta making headlines again?
Nafta is not very popular in some places, such as Ohio, home of the latest Clinton-Obama primary face-off. The state has lost a staggering 225,000 manufacturing jobs since 2001, and many Ohioans blame Nafta. A huge chunk of the Democratic base—union members—also hate Nafta.
He said, she said
Both Obama and Clinton are critical of Nafta, but neither is likely to scrap it. Instead they both say they want to strengthen its environmental and labor regulations, and improve enforcement. But because the race is so tight, they can’t agree with each other too much. So, each is hammering away, suggesting that the other is too soft on Nafta. And, in a mini-controversy last week, Obama took heat for reportedly giving secret assurances to the Canadian government that his anti-Nafta posture was all bark and no bite.
The big picture
Candidates are in a bind. They need to balance the benefits of globalization with sensitivities surrounding protecting jobs at home. With everybody worried about inflation and the sluggish economy, the nation’s employment picture is crucial. On Friday the Labor Department said the economy lost the most jobs in one month in five years. In the end, Nafta-gate is really about the economy and where it’s going—the number one issue for voters in this election cycle—and that’s not boring.
