Tuesday, April 21, 2009

Obama Backpedals on Reopening NAFTA Agreement

Ronald Kirk, the U.S. Trade Representative, stated that President Obama will not push to reopen the North American Free Trade Agreement (NAFTA) over environmental and social concerns. That news was met with approval by Canada's Stephen Harper and Mexico's Felipe Calderon, both strong proponents of the current NAFTA language.

During his presidential campaign, Obama had argued that NAFTA should be re-negotiated and that labor and environmental provisions should be incorporated into the main part of the agreement. Obama's primary challenger Hillary Clinton also indicated she would have supported renegotiating or even opting out of NAFTA. Such criticism of the free trade agreement appealed to Americans losing their jobs to outsourcing and facing cheaper imports from Mexico, as well as to environmental groups. Yet even during the campaign, it was rumored that Obama aides assured Canadian politicians that he was not serious about pulling out of NAFTA.

Dismissing the notion that now was the time to re-open NAFTA, Obama stated that although it would "make sense" to include greater environmental and labor protection in the main part of the NAFTA agreement, the current economic crisis made him hesitant to provoke any disruption in trade. 

The Obama administration also faces other pending decisions on trade matters, including bilateral free trade agreements with Panama and Colombia.  The Bush Administration pushed for approval of those trade agreements, but was thwarted by opposition to Colombia's labor violence and other inadequate protections.

1. How does the global financial crisis represent a grave threat to the free global trade regime?
2. Which countries are benefiting currently from freer trade? Which are not?

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