Obama On NAFTA: This Is "Change We Can Believe In"

Obama On NAFTA: Name This "Change We Can Believe In"

The truths and fictions surrounding Obama's rhetoric North American Free Trade Agreement (NAFTA), and why getting back to basics is the real change America may be looking for.

With the election season in full force, it is once again time for political squabbling to break out as candidates strategically move to the center in search of undecided voters. The transformation from being a primary candidate to presidential frontrunner already is profoundly affecting Barack Obama, who has softened his initially progressive rhetoric in order to galvanize skeptical independents. In doing so, he has been inviting criticism from the media regarding his apparently refashioned political rhetoric. This opens himself up to an abrupt transition that has damaged many promising Democratic candidates in the past. Specifically, Obama's moderation today in his policy concerning the North American Free Trade Agreement (NAFTA) is drawing intense, mainly negative scrutiny from various directions.

Many of his admirers- both current and now former- are concerned that Obama's increasingly elusive promises to "renegotiate" NAFTA will squash any prospects for constructive changes to the agreement. The question which still lingers is whether Obama seeks any, let alone comprehensive improvements in the increasingly controversial status of U.S.- Western Hemispheric policy, or whether he is just another time-honored and charismatic yet flip-flopping politician looking only to opportunistically gain votes.

The Interview With Fortune Magazine

If Obama had one opportunity to disprove all such criticism, his June 18 interview with Fortune Magazine was his chance. During the interview, Fortune journalist Nina Easton asked the Democratic presidential candidate if his position on free trade had changed since the primaries, when he described NAFTA as "devastating" and "a big mistake," at the February 27 Democratic debate in Ohio. On that occasion, Obama asserted he would use "the hammer of a potential opt-out [of NAFTA] as leverage to ensure that we actually get labor and environmental standards that are enforced." However, months later, during the Fortune Magazine interview, Obama renounced his past feelings, stating, "Sometimes during campaigns the rhetoric gets overheated and amplified," which he agreed could apply to some of his NAFTA statements. Still, Obama maintained during the interview that he has never planned to amend NAFTA unilaterally, but "looks forward to a conversation with [Canadian Prime minister Stephen Harper and Mexican President Felipe Calderón]." Obama confirmed, "I'm a big believer in opening up dialogue and figuring out how we can make this work for all people." Once again, without engaging in brazen flip-flopping, but still basically vacating his main point, Obama offered nebulous propositions for dealing with a contentious issue without outlining a firm plan for revising NAFTA. Progressives are becoming increasingly concerned over Obama's ideological torques, anxious to learn which NAFTA revisions Obama will actually pursue if elected, and which ones will be discarded as "overheated" rhetoric.

The controversy unleashed by the Fortune interview immediately drew major media attention and criticism of the putative changes Obama would bring to NAFTA. Democrats and Republicans alike have since attacked Obama as a categorical "flip-flopper." The Washington Post contended, "Obama is just another politician, calling his previous NAFTA rhetoric 'overheated' and that he now endorsed his senior economic advisor's private conversation with the Canadian officials, dismissing 'the anti-NAFTA stuff" as being "nothing more than populist posturing.'"

Amidst Advisorial Confusion, Obama Maintains Consistency

Accusations of flip-flopping against Obama over NAFTA began during the primaries when both Hillary Clinton and Obama stated a desire to re-negotiate key points. Soon afterwards, Canada's CTV released a memo revealing Obama's apparent contradictory statements. The memo publicized a private meeting between Obama's chief economic advisor, Austan Goolsbee, and Canadian officials in which the latter allegedly warned Canadian officials that Obama's "NAFTA-bashing should be viewed as more about political positioning than a clear articulation of policy plans."1 At first, the Obama camp publicly denied that the exchange took place. When the Associated Press made the memo public a few days later, however, Obama confirmed that the meeting, in fact, did occur but that the Canadian official "misinterpreted" Goolsbee's comments. The Canadian government came to Obama's defense and stated that it did not intend to imply any inconsistencies in Obama's campaign message. Reliable or not, the memo nevertheless obscured Obama's position on NAFTA and brought into question his desire to negotiate any meaningful change to the agreement.

Obama's post-primary expansion of his economic team has recently received notice because of the new advisors' widely known penchant for centrism in trade matters. Although several of his main advisors, including Austan Goolsbee and Jason Furman- both longtime centrists- insist that Obama's trade policies have remained uniform since his early Senate years, it is difficult to link Obama's past positions with those being portrayed by his advisors. Furman, one of Obama's newest economic advisors, maintains that Obama is a longtime supporter of a free trade system with appropriate social and, to some measure, protectionist checks. He confirmed, "Barack believes that the benefits of NAFTA were oversold to the public and that it has cost a significant number of jobs in lots of communities and sectors of the economy." Yet, given Furman's background as a staunch advocate of free trade during the 90s, both labor union officials and liberal activists alike have criticized Obama's appointment of such pro-globalization advisors as contradictory. Furman and Goolsbee's well-known pro-trade positions call into question not only Obama's credibility over reforming NAFTA, but also the integrity of the spokespeople who currently represent him with the media.

Critics have accused both Obama and his advisors as being vague. Eventually, this could prove more harmful to his campaign than any actual flip-flopping. In fact, it appears that consistency in trade policies is not necessarily the issue, considering that there is no hard evidence that Obama has gone back and forth with NAFTA. Rather, the inconsistency lies in the inability of both Obama and his top economic advisors, like Furman and Goolsbee, to explain exactly how NAFTA could be improved. As Furman evaded the question- "It is impossible to talk about what Senator Obama's views are on an agreement that doesn't exist. He doesn't want to pull back from the world, he wants to pull back from the failed trade policies of President Bush."

Another take on this issue was published in The Guardian, when Goolsbee explained that Obama's approach can be called "left-libertarianism, that agrees with the liberal consensus on the need to address concerns such as income inequality, disparate educational opportunities and, of course, disparate access to healthcare, but breaks sharply from liberal orthodoxy on both the causes of these social ills and the optimal strategy for ameliorating them."2 This somewhat gobally gook language is indicative of Obama's advisors relying on orthodox theory and not so much on practical solutions. The candidate himself has made only shaky statements detailing his opinion: "I believe in trade, and I won't stand here and tell you I will stop every job from disappearing because of globalization. But I will tell you, I will be thinking about workers and not just Wall Street when I think about trade legislation."3 If Obama's chief advisors do not have concrete plans, it remains unclear whom among his camp does.

It would greatly benefit Obama to not depend entirely on his large economic team to serve as liaisons with the press, advisors who appear to be obscuring his policy claims, while Obama expands on the topic with imprecise and damaging interpretations during interviews. In the height of the general election, the absence of any clear position on a series of crucial economic issues will make Obama accountable for covering all his bases on trade matters once he is president instead of committing himself to a firm reworking of NAFTA prior to the election. If Obama indeed becomes president and Canada and Mexico refuse to re-negotiate NAFTA, will he simply accept their terms or opt out? If he accepts, he will then prove to have been politically posturing like the Canadian article claimed was the case. If he doesn't, and quits NAFTA, he will be acting unilaterally rather than collaboratively. Both policy blueprints could create a troubling situation not only for Obama as a future president, but also for any game plan of action for ameliorating some of NAFTA's inadequacies.

Setting The Record Straight

The media has been rather successful in portraying Obama as a flip-flopper, playing on some of his vague or generalized and often, noncommittal statements. However, Obama insists that the portrayal of inconsistency in his political profile is strictly media hype. Obama insisted in the June 18 Fortune interview, "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. And that we got to be better arguers." 4When asked by Easton about the media's accusations over his apparent transformation, he reiterated his consistency on trade issues: "If you look at my background in Chicago for example, the business community in Chicago has always supported me. They know I am a pro-growth guy, and I'm a pro-market guy. And I always have been." He also stated that since NAFTA was passed, he consistently has made public on his website both the trade pact's benefits and the necessary changes needed to modify the agreement, but not to eliminate it. One example of this fine tuning that can be found on his website states:

"I don't dispute that there may have been some moderate aggregate benefit in terms of lowering prices on consumer goods. But I would also argue that not only did it have adverse affect on certain communities that saw jobs move down to Mexico but for example our agricultural section pretty much devastated a much less efficient Mexican farming system... I think if we manage trade more effectively, if we are thinking about the dislocations that occur as a consequence of it, then we can have free trade and it will be sustainable."5

Currently, Obama has laid out only one solid proposal as part of his trade plan. In a speech made on February 24, Obama fleshed out his plan, stating, "I will not sign any trade agreement as President that does not have protections for our environment and protections for American workers. And I'll pass the Patriot Employer Act that I've been fighting for ever since I ran for the Senate so we can end tax breaks for companies that ship our jobs overseas, and give those breaks to companies that create good jobs with decent wages here in America."6 The semi-protectionist policy provides a Federal income tax credit for "patriot" employers, which would discourage companies to move overseas. This policy buttresses Obama's claims to support free trade, while also improving labor conditions by protecting American jobs and discouraging companies from moving abroad where pay can be abnormally low.

Obama's senate voting record provides some insight into his free trade stance. He consistently has supported enhancing labor regulations and environmental protections as part of future trade agreements, most notably in his opposition in the Senate to CAFTA. Other Obama Senate votes have prompted several of his economic advisors to characterize him as an economic centrist. Jared Bernstein, a senior economist at the Economic Policy Institute, believes Obama's record shows a slightly centralized position on trade and believes both his support of trade and the Employer Patriot's Act in the Senate prove he has voted both ways. Bernstein says although Obama appears to be shifting, "he has consistently aimed to tweak tax codes against outsourcing while at the same time promoting international trade. " Since he joined the Senate in January 2005, he has voted for free trade agreements with Bahrain and Oman, but against deals like CAFTA. Bernstein states that the Senator also voted to ban Mexican trucks from operating in the U.S. (as promised in NAFTA), but failed to cast a vote when it came to the trade agreement with Peru, which was overwhelmingly enacted.7

Obama's Pledge Of Consistency Through His Website

Obama has taken other serious steps to illustrate his consistency. Publicized on his website, Barackobama.com, the Obama camp has created a "fact checker" with a virtual library containing almost every political interview and speech the candidate has made on the campaign trail. The website also contains stories Obama claims as false or poorly quoted, which is entitled, "What Obama Really Said," in order to counter mischaracterizations. For example, as posted on his website, the Chicago Tribune quoted Obama in an article dating back to September 2004, "As part of any current or future trade agreement negotiations, our nation must address the dislocations caused by expanded global trade by maintaining workers' basic benefits and helping them retrain."8 The Associated Press also reported in early 2007, "Obama says NAFTA was not in the best interest of American workers 'because it did not contain the sorts of labor and environmental provisions it should."9

Also on his website, the Obama campaign has posted a handbook entitled, "Renewing U.S. Leadership in the Americas," which contains a section called "Amend the North American Free Trade Agreement." The handbook, published early in his campaign, states, "[Barack Obama] believes that we must make trade work for American workers by opening up foreign markets to U.S. goods and maintaining strong labor and environmental standards. As president he will work to amend NAFTA so that it lives up to those important principles." On the subject of CAFTA titled, "Oppose the Colombia Free Trade Deal," Obama urges, "While the Colombia Free trade Agreement has some labor and environmental standards, these protections are undermined by persistent violence and impunity in Colombia. Labor protections remain useless in an environment where union leaders are routinely assassinated. Barack Obama will work with Colombia to bring the perpetrators to justice and protect labor activists."10 The extensive records on his website indicate consistency, if not clarity, in Obama's free trade policy.

It does not appear that Obama has flip-flopped as much as the media claims, but instead has consistently failed to take an unequivocal stance on NAFTA and its purported failings. As the media's powerful influence proves, being vague on inequitable policies like NAFTA can be more detrimental than taking a controversial stance on the subject. Obama's beliefs are clear, but his unconsolidated plans seem to be unraveling in the face of relentless media onslaught.

Fortune writer Nina Easton made her opinion clear that Obama's positions have not changed, but that he simply has decreased his rhetoric directed against NAFTA as part of an overall change in the tone of his campaign: "During the primaries he relied on a small circle of academics who weren't really part of the economy in a hands-on kind of basis. In terms of shifting his policies, he's tuned down his rhetoric about free trade and NAFTA." She indicated that when it came down to his actual future policies over NAFTA, there has been one clear point, "Does Obama still want to go back to Canada and Mexico and try to get labor and environmental standards into NAFTA? Yes. That has not changed. But he doesn't want to use it as a "hammer" like he said on the primary campaign trail." Easton also maintained that what she gathered most from the interview was the overall change in "tone on trade agreements" instead of changing policies. 11

Winning Over Skeptics

Obama is under harsh scrutiny as the Democratic presidential contender. Not for the first time, Republican presidential nominee John McCain recently labeled Obama as an "inexperienced flip-flopper," stating, "Senator Obama's word cannot be trusted." Being vague makes Obama vulnerable to these kinds of attacks, by allowing his political opponents and the media to define him because he has not always been effectively defining himself. Obscurity on key issues like NAFTA leads people to believe that Obama will do whatever he must do to be elected as president. The primaries were a different time. Now, he needs to quickly find a balance between his expressed left-leaning ideologies that served himself during the primaries and realistic proposals to win over those still undecided voters.

Thus, it may be less that Obama has changed his entire NAFTA platform or is "completely flip-flopping,"12 as the press consistently maintains, but is currently facing a critical issue as a political newcomer, of not always having agreed with himself.13 As Arianna Huffington of the Huffington Post has correctly noted, "Obama needs to remain true to himself and make it clear that he won't leave it up to the 'political winds' to make important decisions on policy." Obama needs to make it clear that he, not his economic advisors, nor the Democratic Party, nor the powerful labor unions, is running for president. If he really wants to be the anti-politician of Washington, he doesn't have to always preach strictly progressive ideals found on the left of the spectrum, but he needs to prove that he is leading. And for Obama, the best leading he can do is hold on to his basic beliefs and run the campaign with the same spirit and ideals that he started with at the beginning. That would be the most real change America could believe in.

1 http://abcnews.go.com/images/Politics/Canwest%20News_1.pdf

2 http://www.tradediversion.net/archives/2008/02/is_obama_better.html

3 http://www.salon.com/tech/htww/2008/03/03/nafta_obama_and_goolsbee_2/

4 Easton, Nina. "Obama: NAFTA Not So Bad After All." Fortune Magazine 18 June 2008.

5 http://factcheck.barackobama.com/factcheck2/2008/06/

6 http://www.barackobama.com/2008/02/24/remarks_for_senator_barack_oba_1.php

7 http://www.guardian.co.uk/commentisfree/2008/jan/09/substancenotstyle

8 www.factcheck.barackobama.com/factcheck/2008/06/18/

9 www.factcheck.barackobama.com/factcheck/2008/06/18/

10 http://www.barackobama.com/pdf/Fact_Sheet_Latin_America_FINAL_060608_IH.pdf

11 http://money.cnn.com/video/ft/#/video/fortune/2008/06/23/fortune.obama.economy.fortune

12 http://politicalticker.blogs.cnn.com/2008/07/08/obama-rejects-accusations-of-flip-flopping/

13 http://www.huffingtonpost.com/arianna-huffington/the-latest-media-blind-sp_b_112740.html

***

This analysis was prepared by COHA Research Associate Maggie Airriess

July 29th, 2008

The Council on Hemispheric Affairs, founded in 1975, is an independent, non-profit, non-partisan, tax-exempt research and information organization. It has been described on the Senate floor as being "one of the nation's most respected bodies of scholars and policy makers." For more information, please see web page at www.coha.org

ENDS

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