QUOTE
November 23, 1993
The North American Free Trade Agreement: Ronald Reagan's Vision Realized
by Michael G. Wilson
Executive Memorandum #371
The approval by the Congress of the North American Free Trade Agreement (NAFTA) is a victory of engagement and competition over withdrawal and complacency. The trade pact, which will eliminate tariffs on goods and services between the United States, Canada, and Mexico over a fifteen-year time span, will create the world's largest market: some 360 million people, with an economic output of more than $6 trillion a year. The NAFTA thus guarantees that American workers will remain the most competitive in the world and that American consumers will continue to have access to the world's finest goods and services.
...
Long-Standing Support for Free Trade with Mexico. Ronald Reagan first proposed a free trade agreement between the U.S. and Mexico in his 1980 presidential campaign. Since that time, The Heritage Foundation is proud of the role it has played in articulating President Reagan's vision of free trade in Latin America and around the world. Since the mid-1980s, Heritage analysts have been stressing that a free trade agreement with Mexico not only will stimulate economic growth in the U.S., but will make Mexico a more stable and prosperous country. Heritage has published over three dozen studies stressing the benefits of free trade in North America.
The Foundation also has highlighted the Mexican success story. Under the leadership of Mexican President Carlos Salinas de Gortari, Mexico has moved further and faster than practically any other country in the world in promoting free market reforms and free trade. The approval of the NAFTA by the Congress is a recognition of these historic advances and will help ensure that the momentum in favor of economic and political liberty throughout the Americas is maintained.
Link
The North American Free Trade Agreement: Ronald Reagan's Vision Realized
by Michael G. Wilson
Executive Memorandum #371
The approval by the Congress of the North American Free Trade Agreement (NAFTA) is a victory of engagement and competition over withdrawal and complacency. The trade pact, which will eliminate tariffs on goods and services between the United States, Canada, and Mexico over a fifteen-year time span, will create the world's largest market: some 360 million people, with an economic output of more than $6 trillion a year. The NAFTA thus guarantees that American workers will remain the most competitive in the world and that American consumers will continue to have access to the world's finest goods and services.
...
Long-Standing Support for Free Trade with Mexico. Ronald Reagan first proposed a free trade agreement between the U.S. and Mexico in his 1980 presidential campaign. Since that time, The Heritage Foundation is proud of the role it has played in articulating President Reagan's vision of free trade in Latin America and around the world. Since the mid-1980s, Heritage analysts have been stressing that a free trade agreement with Mexico not only will stimulate economic growth in the U.S., but will make Mexico a more stable and prosperous country. Heritage has published over three dozen studies stressing the benefits of free trade in North America.
The Foundation also has highlighted the Mexican success story. Under the leadership of Mexican President Carlos Salinas de Gortari, Mexico has moved further and faster than practically any other country in the world in promoting free market reforms and free trade. The approval of the NAFTA by the Congress is a recognition of these historic advances and will help ensure that the momentum in favor of economic and political liberty throughout the Americas is maintained.
Link
QUOTE
September 27, 1993
Why Conservatives Should Support The NAFTA
by Douglas Seay
Executive Memorandum #366
After years of negotiation and repeated postponements, the North American Free Trade Agreement (NAFTA) has been completed and now awaits congressional consideration. As if on cue, a torrent of opposition has erupted.
The most surprising aspect about the NAFTA debate is the criticism by some conservatives. Opposition to the NAFTA is understandable on the part of protectionists, champions of increased government regulation, and those who unashamedly seek to advance their own fortunes at the expense of the national interest. But for conservatives, there should be little dissension. All the existing empirical data regarding U.S. trade with Mexico, as well as basic economic theory stretching back over 200 years to Adam Smith, shows that the NAFTA is good for the U.S. This is why Ronald Reagan, Margaret Thatcher, and Milton Friedman, to name only some of the most prominent conservatives, strongly support the agreement, even with its admitted flaws. As Thatcher told a U.S. audience recently, America has "nothing to fear" from the NAFTA.
...
Make America more competitive abroad
America has two choices with the NAFTA: to become more competitve abroad with it, or to become less competitive without it. With the NAFTA, American companies can become more competitive in foreign markets by taking advantage of Mexico's lower-cost labor, much as the Japanese have long done through co-production arrangements in other East Asian countries.
Help stem the tide of illegal immigration, slow the influx of illegal drugs, and better secure America's border with Mexico. As Mexico's economy grows, fewer Mexicans will migrate to the U.S. in search of employment. Moreover, there is nothing in the NAFTA that will exacerbate the illegal drug trade; removing tariffs on tomatoes is not likely to endanger U.S. security. In fact, U.S. cooperation with Mexican border patrols will increase under the NAFTA.
Link
Why Conservatives Should Support The NAFTA
by Douglas Seay
Executive Memorandum #366
After years of negotiation and repeated postponements, the North American Free Trade Agreement (NAFTA) has been completed and now awaits congressional consideration. As if on cue, a torrent of opposition has erupted.
The most surprising aspect about the NAFTA debate is the criticism by some conservatives. Opposition to the NAFTA is understandable on the part of protectionists, champions of increased government regulation, and those who unashamedly seek to advance their own fortunes at the expense of the national interest. But for conservatives, there should be little dissension. All the existing empirical data regarding U.S. trade with Mexico, as well as basic economic theory stretching back over 200 years to Adam Smith, shows that the NAFTA is good for the U.S. This is why Ronald Reagan, Margaret Thatcher, and Milton Friedman, to name only some of the most prominent conservatives, strongly support the agreement, even with its admitted flaws. As Thatcher told a U.S. audience recently, America has "nothing to fear" from the NAFTA.
...
Make America more competitive abroad
America has two choices with the NAFTA: to become more competitve abroad with it, or to become less competitive without it. With the NAFTA, American companies can become more competitive in foreign markets by taking advantage of Mexico's lower-cost labor, much as the Japanese have long done through co-production arrangements in other East Asian countries.
Help stem the tide of illegal immigration, slow the influx of illegal drugs, and better secure America's border with Mexico. As Mexico's economy grows, fewer Mexicans will migrate to the U.S. in search of employment. Moreover, there is nothing in the NAFTA that will exacerbate the illegal drug trade; removing tariffs on tomatoes is not likely to endanger U.S. security. In fact, U.S. cooperation with Mexican border patrols will increase under the NAFTA.
Link
QUOTE
FLORIDA FARMERS INC.
“ A STRUGGLE FOR SURVIVAL”
THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
President Reagan brought the idea of free trade with Mexico to open discussion during the latter years of his presidency, and President Bush continued developing these plans. Canada and the United States completed a free-trade pact that went into effect on January 1, 1989, and proposals for a triparty agreement followed. Representatives of Prime Minister Mulroney of Canada, President Salinas of Mexico, and President Bush of the U.S successfully negotiated the provisions, concluding in August of 1992, and signed by the heads of state in December 1992. Opponents of the agreement, who hoped for support from a successful Democratic presidential candidate after the U.S elections of November 1992, delayed ratification by the United States.
Bill Clinton, the Democratic nominee and the President, endorsed the pact with reservations during the campaign. After negotiating supplemental amendments to strengthen environmental and labor protection provisions, the new president led a spirited fight in Congress that split the Democrats but, with overwhelming Republican support, secured ratification of NAFTA in November, 1993.
...
On the occasion of the implementation of the agreement on January 1, 1994. Indian people of Chiapas declared war on the Mexican government, calling NAFTA traitorous. An armed uprising caused violence and death, contradicting the pronouncement of President Salinas that Mexico was on its way to attaining new status as a modern, industrialized nation. The Chiapas uprising highlighted a fact brought out in the NAFTA debate: vast sections of rural Mexico that have been left out of Salinas´ modernization drive may be fertile ground for future instability.
The countries volatile financial markets reacted in panic to the rebellion, with the largest one-day drop ever recorded. In the following days, the market more than made up for the losses, with much of the buying by U.S and British institutional investors.
A few months later, an assassin shot and killed Luis Donaldo Colosio, the ruling parties´ handpicked successor to President Salinas. The act crippled the confidence of a country striving to enter the select company of First World nations. Economic uncertainty and political disruption joined violent rebellion in a land whose citizens had hoped for peace and stability. The one party P.R.I system elected Zedillo president, who was Salinas´ chosen successor.
An economic bailout ($50 billion line of credit) by the United States helped the new leader work to improve Mexico´s woes, but with he devaluation of the peso NAFTA has done to affect the quality of life in Mexico. The collapse of the peso has made Mexican growers so desperate for dollars they will all but give there winter crops away. The low prices make profits for the middlemen, but consumers in the U.S do not benefit from the price wars being waged, as retail prices tend to remain fairly constant. The farm lobby in the U.S is concerned with other interests, namely cotton and grain, and does not give the Florida growers and suppliers much attention.
Link
“ A STRUGGLE FOR SURVIVAL”
THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
President Reagan brought the idea of free trade with Mexico to open discussion during the latter years of his presidency, and President Bush continued developing these plans. Canada and the United States completed a free-trade pact that went into effect on January 1, 1989, and proposals for a triparty agreement followed. Representatives of Prime Minister Mulroney of Canada, President Salinas of Mexico, and President Bush of the U.S successfully negotiated the provisions, concluding in August of 1992, and signed by the heads of state in December 1992. Opponents of the agreement, who hoped for support from a successful Democratic presidential candidate after the U.S elections of November 1992, delayed ratification by the United States.
Bill Clinton, the Democratic nominee and the President, endorsed the pact with reservations during the campaign. After negotiating supplemental amendments to strengthen environmental and labor protection provisions, the new president led a spirited fight in Congress that split the Democrats but, with overwhelming Republican support, secured ratification of NAFTA in November, 1993.
...
On the occasion of the implementation of the agreement on January 1, 1994. Indian people of Chiapas declared war on the Mexican government, calling NAFTA traitorous. An armed uprising caused violence and death, contradicting the pronouncement of President Salinas that Mexico was on its way to attaining new status as a modern, industrialized nation. The Chiapas uprising highlighted a fact brought out in the NAFTA debate: vast sections of rural Mexico that have been left out of Salinas´ modernization drive may be fertile ground for future instability.
The countries volatile financial markets reacted in panic to the rebellion, with the largest one-day drop ever recorded. In the following days, the market more than made up for the losses, with much of the buying by U.S and British institutional investors.
A few months later, an assassin shot and killed Luis Donaldo Colosio, the ruling parties´ handpicked successor to President Salinas. The act crippled the confidence of a country striving to enter the select company of First World nations. Economic uncertainty and political disruption joined violent rebellion in a land whose citizens had hoped for peace and stability. The one party P.R.I system elected Zedillo president, who was Salinas´ chosen successor.
An economic bailout ($50 billion line of credit) by the United States helped the new leader work to improve Mexico´s woes, but with he devaluation of the peso NAFTA has done to affect the quality of life in Mexico. The collapse of the peso has made Mexican growers so desperate for dollars they will all but give there winter crops away. The low prices make profits for the middlemen, but consumers in the U.S do not benefit from the price wars being waged, as retail prices tend to remain fairly constant. The farm lobby in the U.S is concerned with other interests, namely cotton and grain, and does not give the Florida growers and suppliers much attention.
Link
QUOTE
U.S. Foreign Economic Policy and Relations with Japan, 1969-1976
Thomas W. Zeiler
The University of Colorado
Working Paper No. 1
U.S.-Japan Project
On August 15, 1971, President Richard M. Nixon revealed a nationalistic plan to contend with the domestic and international economic problems of the United States, many of them caused by the emergence of Japan as a trade competitor. An international payments imbalance, an overvalued dollar, a shrinking trade surplus, inflation, and import competition led him to impose a ten percent import surcharge and suspend the dollar's convertibility into gold. Protectionism and shutting of the gold window stunned United States allies, particularly Japan. The U.S. unilaterally undercut the Bretton Woods monetary system of fixed exchange rates that helped stabilize the yen and seemingly veered from decades of adherence to the liberal trade principles which had benefited Japanese exports. Such action so worried Japan that observers there labeled the August announcement the second Nixon Shock. Nixon's moves led to the Smithsonian Agreement of December, 1971, which paved the way within a few years for floating exchange rates and thus closed the Bretton Woods era. Higher tariffs exacerbated existing trade tensions between the U.S. and Japan, which were already sparring over textile trade policies. In short, the decisions of 1971 reverberated throughout the global economic system, as well as the cold war alliance. Perhaps the most significant implication was the clear sign that Japan had assumed a role, alongside the United States, as a dominating player in the world economy.
...
Theoreticians have grappled with the various levels of decision-making. John Odell, U.S. International Monetary Policy, argues that neither domestic or bureaucratic politics had significant effects on Nixon's decisions. Instead, a combination of global market conditions, declining American power, and influence of ideas and beliefs held by officials on whether to reform the monetary regime or coerce a change dictated choices. Joanne Gowa, Closing the Gold Window, takes issue with Odell. She argues that Treasury Department economic nationalists, including the Volcker Group, placed domestic interests over the maintenance of the international monetary regime when it decided to suspend gold convertibility. Gowa resists the notion that American monetary policy was insulated from social and political pressures, and that global, structural influences and the decline of U.S. power dictated the American approach to monetary affairs (as regime theorists believe). Gowa also questions the bureaucratic policy model, claiming that there was no power struggle within the Nixon administration, but rather a consensus that it was better to destroy Bretton Woods than lose autonomy over domestic economic decisions. Japan is not a focus in these books, which are based on a handful of declassified document as well as interviews. Supporting her conclusions that the Nixon administration prioritized domestic over international economic policies, the survey by David P. Calleo, The Imperious Economy, studies the interaction of U.S. inflation and domestic policies on the international trade and monetary systems. Calleo argues that Nixon faced greater global economic problems than his immediate predecessors, but still sought to maintain U.S. hegemony by neomercantilist policies that safeguarded domestic interests rather than Bretton Woods regime maintenance.
...
Why the U.S. did not set a target date to end the surcharge (and possibly renew dollar convertibility) was the key question after Japan floated the yen. Japan claimed that the tariffs violated GATT multilateral principles. Yet interestingly, the State Department, CEA, Nixon, and free-trade lobbies such as the Emergency Committee on American Trade, led by Nixon ally Donald Kendall of Pepsico, appeared just as insistent as the Treasury in yen revaluation and a lowering of Japanese import barriers. Confirmation of an uncomfortable consensus inside and outside of the administration on monetary policy toward Japan is necessary.
Still, many academics, monetary reformers, Democrats, and others urged the administration to change the price of gold and end the surcharge rather than rely on European and Japanese revaluation. Discussion began in October 1971 on realignment of currencies by other nations so that America could reach it objective of shifting its payments balance by $13 billion. Connally remained tough, although Treasury records should reveal the full extent of how Japan figured into his strategy on realignment, as well as the extent of his domestic political concerns and economic nationalism, both of which James Reston argues were critical to understanding him.7
In November 1971, "Typhoon Connally" visited a wary Japan, following his advance team led by Paul McCracken, and records of meetings (and accounts by Ambassador Armin Meyer) with the Japanese finance ministry and Prime Minister Sato should also be revealing on the American position. Connally was conciliatory but also adamant that Japan had to cooperate with America. Japan also believed that Connally sought an alignment agreement first with Japan as leverage with the Europeans. Indeed, at the G-10 meeting in Rome a few weeks later, Connally and Mazuta waited for a response on revaluation from the Europeans. It would be worthwhile to determine if America had strong-armed or persuaded Japan to agree to yen revaluation and then unite to confront the Common Market.8
Link
Thomas W. Zeiler
The University of Colorado
Working Paper No. 1
U.S.-Japan Project
On August 15, 1971, President Richard M. Nixon revealed a nationalistic plan to contend with the domestic and international economic problems of the United States, many of them caused by the emergence of Japan as a trade competitor. An international payments imbalance, an overvalued dollar, a shrinking trade surplus, inflation, and import competition led him to impose a ten percent import surcharge and suspend the dollar's convertibility into gold. Protectionism and shutting of the gold window stunned United States allies, particularly Japan. The U.S. unilaterally undercut the Bretton Woods monetary system of fixed exchange rates that helped stabilize the yen and seemingly veered from decades of adherence to the liberal trade principles which had benefited Japanese exports. Such action so worried Japan that observers there labeled the August announcement the second Nixon Shock. Nixon's moves led to the Smithsonian Agreement of December, 1971, which paved the way within a few years for floating exchange rates and thus closed the Bretton Woods era. Higher tariffs exacerbated existing trade tensions between the U.S. and Japan, which were already sparring over textile trade policies. In short, the decisions of 1971 reverberated throughout the global economic system, as well as the cold war alliance. Perhaps the most significant implication was the clear sign that Japan had assumed a role, alongside the United States, as a dominating player in the world economy.
...
Theoreticians have grappled with the various levels of decision-making. John Odell, U.S. International Monetary Policy, argues that neither domestic or bureaucratic politics had significant effects on Nixon's decisions. Instead, a combination of global market conditions, declining American power, and influence of ideas and beliefs held by officials on whether to reform the monetary regime or coerce a change dictated choices. Joanne Gowa, Closing the Gold Window, takes issue with Odell. She argues that Treasury Department economic nationalists, including the Volcker Group, placed domestic interests over the maintenance of the international monetary regime when it decided to suspend gold convertibility. Gowa resists the notion that American monetary policy was insulated from social and political pressures, and that global, structural influences and the decline of U.S. power dictated the American approach to monetary affairs (as regime theorists believe). Gowa also questions the bureaucratic policy model, claiming that there was no power struggle within the Nixon administration, but rather a consensus that it was better to destroy Bretton Woods than lose autonomy over domestic economic decisions. Japan is not a focus in these books, which are based on a handful of declassified document as well as interviews. Supporting her conclusions that the Nixon administration prioritized domestic over international economic policies, the survey by David P. Calleo, The Imperious Economy, studies the interaction of U.S. inflation and domestic policies on the international trade and monetary systems. Calleo argues that Nixon faced greater global economic problems than his immediate predecessors, but still sought to maintain U.S. hegemony by neomercantilist policies that safeguarded domestic interests rather than Bretton Woods regime maintenance.
...
Why the U.S. did not set a target date to end the surcharge (and possibly renew dollar convertibility) was the key question after Japan floated the yen. Japan claimed that the tariffs violated GATT multilateral principles. Yet interestingly, the State Department, CEA, Nixon, and free-trade lobbies such as the Emergency Committee on American Trade, led by Nixon ally Donald Kendall of Pepsico, appeared just as insistent as the Treasury in yen revaluation and a lowering of Japanese import barriers. Confirmation of an uncomfortable consensus inside and outside of the administration on monetary policy toward Japan is necessary.
Still, many academics, monetary reformers, Democrats, and others urged the administration to change the price of gold and end the surcharge rather than rely on European and Japanese revaluation. Discussion began in October 1971 on realignment of currencies by other nations so that America could reach it objective of shifting its payments balance by $13 billion. Connally remained tough, although Treasury records should reveal the full extent of how Japan figured into his strategy on realignment, as well as the extent of his domestic political concerns and economic nationalism, both of which James Reston argues were critical to understanding him.7
In November 1971, "Typhoon Connally" visited a wary Japan, following his advance team led by Paul McCracken, and records of meetings (and accounts by Ambassador Armin Meyer) with the Japanese finance ministry and Prime Minister Sato should also be revealing on the American position. Connally was conciliatory but also adamant that Japan had to cooperate with America. Japan also believed that Connally sought an alignment agreement first with Japan as leverage with the Europeans. Indeed, at the G-10 meeting in Rome a few weeks later, Connally and Mazuta waited for a response on revaluation from the Europeans. It would be worthwhile to determine if America had strong-armed or persuaded Japan to agree to yen revaluation and then unite to confront the Common Market.8
Link
Can't forget Nixon policy.
