There are inequities in most trade agreements and they can always be improved, especially as new technologies evolve and the workplace needs change. Interconnected, globalized trade has increased the economies of both developed and developing nations, including the United States, and has drawn countries together through mutual self-interest, which enhances security and stability. Consumers benefit from more efficient supply chains and lower prices, and since we are a consumption- and service-driven economy now, we benefit more than most from freer and more frictionless trade.
Nonetheless, all trade agreements are not equal and deals with countries who respect the rules contrast starkly with those who cheat. China, for example, has abused its membership in the World Trade Organization, does not follow the rules, and should be held accountable.
The North American Free Trade Agreement has drawn the attention of critics of the existing free trade system. While the treaty is not perfect, it would be better to reform and modify it than for the United States to withdraw. Mexico needs to update its labor standards and Canada’s strict limits on American dairy products, such as a 270 percent tariff on milk, should rightly be part of a renegotiation. WTO statistics show that 7.1 percent of Canadian imports face a tariff of higher than 15 percent, compared to only 2.8 percent of United States imports. Further, Canada places more agricultural products under import quotas than the United States, with 9.5 percent of imports subject to tariffs in Canada compared to 4.5 percent in the United States. This is protectionism that is inconsistent with the principles of NAFTA.
One way to improve NAFTA is to assure that American workers have the skills and tools necessary to compete globally. Higher education in the United States too often fails to correlate with the needs of the modern workforce. Focusing on Career Technical Education programs and on Science, Technology, Engineering, and Mathematics curricula will equip our students to succeed in today’s economy. Investments in human capital like this will benefit workers much more than withdrawing from global trade and imposing tariff barriers.
Globalized trade, which integrates countries and supply chains, like multilateral trade treaties, brings alignment of interest among countries and thus creates a platform for cooperation on security. Shared economic interests are the most enduring means of aligning nations’ strategic interests.
The energy industry is a good example. Export of abundant U.S. natural gas to Europe will reduce European dependence on Russian energy, and hence reduce European dependence on Russia and undermine Russia’s hegemonic goals.
Withdrawal from the Trans-Pacific Partnership was unfortunate. TPP provided a framework for the United States to strengthen its relationships with partners in both Asia and Latin America. Closer ties with our Pacific partners would serve as a bulwark against Chinese mercantilist ambitions and would stimulate respect for rule of law in Latin America. It is no secret that Chinese investment in Latin America is increasing precipitously. TPP might have offered an alternative.
If partners are not required to follow the rules of a trading system, abuse will ensue–like China, which makes American companies enter into “partnerships” with Chinese companies to gain access to its markets. Then, inside the tent, Chinese companies steal billions of dollars’ worth of technology and IP each year. Hopefully the United States will address China’s abuses.
Again, while no trade arrangement is perfect, the positives far outweigh the negatives of the WTO system and multilateral agreements like NAFTA and even TPP (in some form). It is incumbent upon the United States to take advantage of these opportunities and hedge against their liabilities.
Rep. Francis Rooney, a Republican, represents Florida’s 19th congressional district. He is the Vice-Chairman of the House Foreign Affairs Committee and previously served as U.S. Ambassador to the Holy See under President George W. Bush from 2005 to 2008.
