Whither NAFTA?
We've established earlier ("Is the U.S. a Trade Bully? 30Sept.) that indeed the United States is a trade bully. How unusual. After all, don't we all agree that "might makes right"? In that if you're sufficiently powerful who, after all, will oppose you? Since time immemorial this is the manner in which collectives as well as individuals have behaved in response to the stress engendered by a challenge to power. Except, we are also rational and moral human beings (if/when we choose to be, on occasion), and we also agree that one's word should be respected and one should be held to account when behaving contrary to one's word. Well, that's why written contracts, legal documents came into existence, is it not? If one cannot have complete faith in the word of a gentleman, gentlewoman, or in this particular case, a respected state, then with a mutually-acceptable legal concordance we trust one another to accede to the spirit, to the letter of the agreement.Alas, we have seen that legal agreements, even if they are (purportedly) supported by mutually-agreed-upon bodies of oversight given the legal apparatus required to bring judgement in disputes in a totally objective manner, which respects the guidelines of the original agreement, one party feels sufficiently self-assured to shrug off the final verdict and declare said judgement, regardless, non-binding. Is this fair? How could it be? In a legally constituted court of law, verdicts are generally immutable. NAFTA tribunals have time and again brought down rulings in favour of Canada, yet the U.S. has chosen to ignore them.
So here we have an instrument of tri-party agreement, the North-American Free Trade Agreement (NAFTA), whose purpose is to enable free trade between the three countries which comprise the continent: United States, Canada, Mexico. Clever negotiators, well steeped in the law, in trade, in sovereignty issues, hammered out a document which, in its final appearance, was meant to satisfy domestic and trans-national requirements in trade and the law. From its inception to its final implementation, after its staged entry, the agreement has proved itself to be a success in the eased movement of goods and services between the three countries. There have been irritants aplenty along the way, some of which have been resolved, some of which continue to fester.
The U.S. Senate is responsible for, and has the controlling authority for all U.S. trade pacts. The U.S. Senate through the U.S. Trade Representative has virtually always been successful in incorporating U.S. domestic unfair trade practices legislation in almost all bilateral and multilateral trade pacts whether through the GATT (General Agreement on Trades and Tariffs) or its successor, the WTO (World Trade Organization) and NAFTA. It has always been the case for virtually the entire last century that U.S. administrations have ignored their obligations under these pacts, to protect domestic markets.
Under the U.S. political system it has always been the case that local self-interested lobby groups, be they fisheries, lumber, steel, have been able to bump up to the national scene these purely local issues. History reflects that the U.S. International Trade Commission and the U.S. Department of Commerce havecolluded to frustrate the letter of the law, to stifle their obligations in these trade pacts by ensuring that the foreign exporter is paralyzed by the uncertainty of the U. S. markets they were serving, thus for the most part, shutting down these export markets. This ploy has been successfully played over and over again, despite the fact that these local domestic industries have not been able to prove by any stretch of the imagination, charges of unfair trade practises by the foreign exporter.
Rather, it has always been the case that instead of investing in upgrading their manufacturing facilities and their productivity, they have relied upon local political strategems, aided by their senate representatives to support industries which are either highly subsidized or unproductive. The greater insult is that the Sarbanes-Oxley Amendment to provide these non-competitive industries with the duties illegally collected indicates just how far the U.S. Congress has gone to defeat any meaningful free trade pact. As in the case of softwood lumber, fisheries industries, steel, sugar.
As though these industries were not the subject of massive subsidies which have punished the U.S. consumer for decades; example: sugar, corn. U.S. subsidies to farmers are outrageous and anachronistic.
It's unfortunate that the U.S. market is really the most lucrative for the world's exporters. At the end of the day, the bottom line is that all foreign industries wishing to enter the U.S. market are subject to the uncertainties of the U.S. domestic-political lobby. To think that, in particular, under the George W. Bush administration, (Bush, laughably, is said to consider himself a free-trade), the international trading community has been brought to its knees, albeit also at the expense of the U.S. consumer, the U.S. wholesale and consumer communities.
One can only hope that future American administrations will show some maturity in meeting their international obligations to the trade treaties they sign. Until then state industries, both industrial and resource-based, who continue their tradition of uncompetitiveness will continue with impunity, to punish U.S. citizens with their inefficiencies leading to ever-higher domestic costs.
This is glaringly obvious on the softwood lumber issues. For example, it is well established that all marketable timber in the United States is privately owned. They have changed hands so frequently that marketing timber at what could be considered a reasonable price based on market conditions has literally ceased. This is typical of situations brought on by U.S. Congress choosing to ignore the blatant inefficiencies of such industries. They are willing to increase the cost to all U.S. taxpayers by rewarding such political gerrymandering. In any case, this is costing an additional thousand dollars U.S. per house, yet U.S. consumers readily roll over for such treatment. For a society that prides itself on fair play this is ludicrous.
For the present, it looks pretty much like the U.S. likes open borders leading outward for trade, the better to expand its markets. Trouble is, they really would like it to be a one-way effort as they have so effectively demonstrated in putting up roadblocks to goods entering their markets, and steadfastly refusing to honour their legal obligations to other countries. Shame.
posted by Pieface @ Sunday, October 02, 2005
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