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Friday, March 24, 2017

Larry Summers on Why Scrapping NAFTA Would be Trump’s Big Gift to China [feedly]

the remarks by Summers are characteristically a bit imperious,but his points on NAFTA improvements rather than cancellation -- not including his concerns vis a vis China in the linked article -- are important. 

Labor and environmental "standards" in an international agreement are notoriously difficult to enforce, especially across national borders. But they ARE possible to enforce WITHIN a national border. Consider NAFTA. Canada has stronger labor law protections than the United States which has stronger labor law protections than Mexico. Labor law protections include a range of issues: minimum wage and ours laws, child and enslaved labor bans, collective bargaining, health and safety on the job, How does a grievance against a labor law violator get adjudicated, other than by cancelling the agreement? Mexico has very weak welfare institutions and doubtful ability to enforce its own, nevermind international, standards. Very difficult to define mutually acceptable standards. But the problem of trade for US workers is not so much what happens across borders beyond their control -- but what happens to the DISTRIBUTION OF WEALTH GAINS FROM TRADE INSIDE THE UNITED STATES!  If the gains from US trade serve a human rights agenda -- that sets the example for other countries to follow with THEIR trading gains, and should serve better than a thousand toothless "warnings"  that  a trading partner should not be shooting trade unionists.

Why Scrapping NAFTA Would be Trump's Big Gift to China
http://economistsview.typepad.com/economistsview/2017/03/why-scrapping-nafta-would-be-trumps-big-gift-to-china.html


Larry Summers:

Why scrapping NAFTA would be Trump's big gift to China: I was in Mexico Thursday seeing the Mexican president, foreign minister and finance minister and addressing a convention of bankers. The only subjects anyone is interested is the future of NAFTA and U.S. Mexican relations.
I came to Mexico from Beijing, and so I was able to report that there was no greater strategic gift the United States could give China than to abrogate NAFTA and rupture the North American community. ... China apart, NAFTA strengthens the U.S. economy. ...
There is a silver lining in all the fuss over NAFTA — it needs updating. Digital trade didn't exist in 1993. Thinking has shifted on the need to assure that trade agreements are in worker interests. This means more emphasis on labor standards and more need to ensure that dispute settlement systems do not overly empower corporate interests. Most important, with more competition from Asia and with the increased sophistication of the Mexican economy, there is a strong case for strengthened rules of origin that enhance North American manufacturing.
Changes along these lines may have an "America first" aspect but they are also in Mexico's interest. They are the right way forward.
It is also essential that the United States and Mexico find a way forward on immigration. A wall is a 19th-century response to a 21st-century concern. I'm told that most illegal immigration does not take place through people crossing open borders in the desert — the only thing a wall could address. Rather it takes place through illegal entry at legal checkpoints as people are smuggled in in freight containers and the like. This will be unaffected by a wall. Technology, data science, enhanced collaboration, and cooperation with respect to Central America are much better ways to resist illegal immigration flows. They are also much more likely to strengthen our alliance with our most populous neighbor.

 -- via my feedly newsfeed