Thursday, June 26, 2008

Barack Obama is not quite sure where he stands on the North American Free Trade deal. He has changed his position on several occasions, all the while claiming to be consistent. Mr. Obama needs to establish a trade policy that does not shift according to the preferences of the audience he is courting.

During the Democratic primaries and caucuses, when Mr. Obama and Hillary Clinton were competing in the Rust Belt states, Mr. Obama began attacking NAFTA. He stated that he would re-negotiate the treaty and even abrogate it if his demands were not met. He declared in Cleveland: “I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced.” Mr. Obama’s statements were well-received in the Midwest where many workers blame NAFTA for the loss of jobs in the auto, manufacturing and textile industries. Yet, a media firestorm subsequently erupted when a Feb. 8 memo was leaked to the Associated Press. The memo described a meeting between Mr. Obama’s economic adviser, Austan Goolsbee, and Ottawa’s consul-general in Chicago, George Rioux. According to the memo, Mr. Goolsbee reassured the Canadian representative that Mr. Obama’s statements regarding NAFTA were more “reflective of political maneuvering than policy.”

In a recent interview with Fortune magazine, Mr. Obama attempted to clarify his viewpoint. He stated that he would not abrogate NAFTA unilaterally: “I’m a big believer in opening up a dialogue and figuring out how we can make this work for all people.” He declared that he is indeed a free trader; he will also work to ensure that trade treaties are revised to include higher labor and environmental standards. He insisted that he is consistent: “I’ve always been a proponent of free trade and I’ve always been a believer that we have to have strong environmental provisions and strong labor provisions in our trade agreements.”

In other words, Mr. Obama wants to cover all his bases. He seeks to satisfy both free-trade voters and key Democratic constituents who dislike NAFTA. Yet, he has not answered this fundamental question: What happens if, once he is president, he demands that NAFTA be re-negotiated, and Canada and Mexico refuse to re-negotiate or they simply reject his terms? Then, will he accept the current treaty or opt out? If he is willing to accept the current treaty after all, this would mean that he was indeed posturing during the campaign. On the other hand, if he abrogates the treaty, this would indeed be a unilateral revocation of an international American agreement.

Mr. Obama needs to show political courage and take a firm stand rather than flipping and flopping - and thereby losing credibility as a proponent of the “new politics.”

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