Monday, June 07, 2004

Rocky Mountain News: NAFTA Bunk from one of the architects of slavery

Rocky Mountain News: Opinion

Rocky Mountain News

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Speakout: NAFTA can help resolve lumber tiff
By William E. Brock, Special to the News
June 7, 2004

The political season has put trade, especially the landmark North American Free Trade Agreement, back in the spotlight. As we mark the 10th anniversary of NAFTA it's important to look at what the agreement has meant for the three countries that signed it, and how the growing trade fostered by NAFTA has benefited the people of Colorado.

There is little doubt that from an economic standpoint, NAFTA has been a tremendous success. Canada and Mexico are now our largest trading partners, with double the cross-border volume from 10 or 12 years ago. The U.S. and Canada have the largest bilateral trade relationship in the world - $442 billion in 2003 - and our trade with Mexico exceeds our trade with Japan, even though Japan's economy is eight times larger than Mexico's. Trade under NAFTA has created jobs that didn't exist before, and because the jobs are tied to exports they generally pay a higher salary.


Colorado is a good example of how international trade works at a local level. According to state figures, Colorado exported a total of $6.1 billion in goods around the world in 2003, a gain of more than 10 percent from the year before. According to the U.S. Department of Commerce, those exports created or retained 68,000 jobs in the state.

Looked at through the prism of NAFTA, Colorado does exceedingly well. The state sold $570 million in products to Mexico in 2003 and $1.4 billion to Canada, Colorado's largest foreign customer. So this 10th anniversary of NAFTA is certainly something to celebrate.

NAFTA also contains the mechanism for resolving disputes between the partners, the type of disputes that inevitably crop up in any trading relationship. On and off over two decades, the U.S.-Canada trading relationship has been strained by a dispute over softwood lumber. The U.S. upped the ante in 2002 by slapping a 27 percent tariff, or import tax, on softwood lumber we import from Canada. Three weeks ago, a NAFTA dispute panel ruled against the United States in the case, the latest in a series of international rulings that have generally supported Canada on the softwood lumber issue.

This long-running dispute matters to the people of Colorado because the state imported $67 million in Canadian softwood last year. Canadian softwood is popular with homebuilders, and is widely used to build new homes and remodel older ones. So the stakes are high, since anything that adds to the cost of a new home is a potential drag on the nation's economic recovery and a threat to jobs in construction and related fields. The tariff makes it more difficult for many people to realize the American dream of homeownership.

It also doesn't make sense to harass one's neighbor, ally and friend with a punitive tariff, although that's exactly what the U.S. is doing. A dispute like this violates the spirit of NAFTA, which like most trade agreements, is intended to strengthen friendship and cooperation between the partners. NAFTA is a strategic alliance that helps make all of North America stronger and safer by presenting a unified front against terrorism, drugs and other common issues.

To the south, NAFTA has been a catalyst for economic, environmental and political reforms in Mexico. To the north, the U.S. and Canada work closely to secure our border so it remains open for business but closed to terrorists. We also rely on Canada as our No. 1 source of imported oil, a surprise to many who assume most of our oil imports come from the Middle East. Canadian energy is vital to our economy and to our overall energy security. Clearly we want our relationship with Canada to stay on track.

In his recent meetings at the White House, Canada's prime minister, Paul Martin, told President Bush that improving relations with the United States is a top priority. Both governments have signaled a commitment to breaking the impasse over lumber.

Working out an agreement with Canada will repair this important relationship, reaffirm our position as a committed fair trader and give the U.S. economy a much-needed boost. The free-trade principles set forth in NAFTA provide the framework for doing that.

William E. Brock is a former U.S. senator from Tennessee, former U.S. secretary of labor and former U.S. trade representative. He is one of the architects of the NAFTA. Today he is co-chair of the U.S.–Canada Partnership for Growth, an alliance designed to raise awareness of the negative impact of the U.S. lumber tariff.

Copyright 2004, Rocky Mountain News. All Rights Reserved.


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