Not any good reason for this

by on February 19, 2009 at 9:51 pm in Current Affairs | Permalink

Here is the story, but this bit caught my eye:

Potential strains in relations between the US and Canada were exposed today when Barack Obama, on his first foreign trip as president, hinted at renegotiation of the North American Free Trade agreement.

Obama at a joint press conference with the Canadian prime minister, Stephen Harper, tried to square a campaign pledge to renegotiate the agreement while at the same time avoid sparking a trade war with Canada.

Obama told reporters at the press conference in Ottawa he wanted to
begin talks on adding provisions to the agreement relating to workers
and to the environment.

On this one it is announced in Canada but the real victim is Mexico.  The simple truth is that so far economic policy has fallen short of being good.  Some (not all) left-wing bloggers may be reluctant to say this so early in the tenure of such a long-awaited administration, but perhaps a few of them are thinking it.  There is the stimulus, the Geithner banking plan, and the housing plan.  Of course there are differences of opinion but perhaps it is fair to say he is straining to be one out of three?

1 ben February 19, 2009 at 10:12 pm

We live in a democracy though, not a rationality-ocracy. Politicians have to please their consituents, and have to do things that aren’t in the public interest to do so, which is as it should be. The question shouldn’t be whether or not the rhetoric drives us nuts because we know better, it should be whether or not the policy choices are going to have real and significant negative repuercussions. Making noise about renogetiating NAFTA isn’t a big deal, NAFTA had very little effect on US-Canada trade anyway. Putting on the full court press to get the stimulus package passed *is* a big deal. Don’t jump down the Obama administration’s throat every time they do or say something that’s not what an economist would do or say. Save it for when they’re contemplating something that’s really dangerous.

2 Anonymous February 19, 2009 at 10:16 pm

No one wants to say so out loud, but renegotiating NAFTA to add labor and environmental clauses is primarily aimed at Mexico, not Canada. If anything, Canada is more friendly to organized labor (some provinces already have card-check laws for unions, for instance) and more environmentally minded (Greenpeace was founded in Canada). Back in the 1980s the big environmental issue was Canadians complaining about acid rain caused by American industry (how come we never hear about that anymore? I guess all the rust belt factories shut down or something).

The only possible environmental issue with Canada is the highly polluting oil sands, but since those represent America’s own energy security, the US administration is unlikely to make more than a token fuss.

3 MHodak February 19, 2009 at 10:35 pm

“fallen short of being good”

Tyler, you should expand your vocabulary. The word is “bad.”

4 Shaun February 19, 2009 at 11:07 pm

Ben you said, “Making noise about renogetiating NAFTA isn’t a big deal, NAFTA had very little effect on US-Canada trade anyway”. Care to show where you’re getting your information? Because that would fly in the face of every single study on U.S-Canada FTA & NAFTA.

5 Superheater February 19, 2009 at 11:22 pm

“I don’t know how things will turn out – I hope the Obama presidency smooths out and the country rights itself sooner rather than later..”

Hope should be reasonable. Hope without reason is fantasy.

There were those that were wary of a man who’s run nothing but his mouth.

Lets be honest, the media was in the tank for Obama and now they can’t even hide the dangerous fusion of arrogance and inexperience and are whispering words like “failure”.

6 DanC February 19, 2009 at 11:59 pm

I hope Obama stops coming up with ideas before the stock market hits zero

7 John Pertz February 20, 2009 at 12:10 am

As a libertarian, I cant say I am SO dismayed by Obama. After all we just had 8 years of Bush, so my standards for presidential performance are pathetically low.

He is doing just what I thought he would do. He is largely acting in a manner that serves the needs of the interests that got him where he is today. And he is calling plays out of the ideological playbook that appeals mostly to center left democrats.

The housing plan bails out disadvantaged home owners. You would be hard pressed to argue that propping up asset prices in the short run that want to head downward is good economic policy. However, helping poor home owners is good political policy for Obama.

The stimulus is largely a joke in terms of economic potential. No politician knows what investments could get the economy back on track. If they knew those answers they wouldnt be working in DC.

I dont think he is crazy or stupid. I just think he is largely committed to crafting policies that serve his needs and they will ultimately fail. In fact, the policies he has championed so far are more of a side show than anything else. They arent the kinds of real policies that serious people committed to socially optimal economic outcomes would stand behind. They are a complete and utter representation of the private and ideological interests that have put Obama in the position that he is today.

Why people thought he would do anything more or less is beyond me. As for the topic at hand, its not a particularly good thing to make threats at your trading partner, but its very mild in degree. It is definitely more of a symbolic political gesture than anything else.

8 RJ February 20, 2009 at 1:17 am

“Politicians have to please their consituents, and have to do things that aren’t in the public interest to do so, which is as it should be.”

As it should be? In hell, maybe.

9 edeast February 20, 2009 at 2:40 am

Watching the press conference it didn’t seem that bad, Obama wanted to bring the supplementary agreements on the environment and labour into the main agreement, mainly to save face on his campaign promises is my reading. And there is no way Canada could fight a trade war with America. http://worthwhile.typepad.com/worthwhile_canadian_initi/2009/02/worthless-canadian-reaction.html

10 bartman February 20, 2009 at 8:52 am

Uh, MW, acid rain is caused by the release by combustion of sulfur dioxide from coal (and fuel oil), which mixes with water in clouds and forms sulfuric acid. SO2 is not a product of incomplete combustion. Catalytic converters are used to reduce ground-level photo-chemical smog, not acid rain.

11 Brian J February 20, 2009 at 9:36 am

“Some (not all) left-wing bloggers may be reluctant to say this so early in the tenure of such a long-awaited administration, but perhaps a few of them are thinking it. There is the stimulus, the Geithner banking plan, and the housing plan.”

Considering the deep pile of crap that the previous administration left for the current one in domestic policy alone, I’m going to give them more than a month.

I’m not sure I am pleased so far, but I don’t know if I am disappointed, either. The stimulus plan looks like it was a good first start, even if some moves towards the other side resulted in a worse-than-necessary bill. Obama’s said he’s open to more stimulus down the line. This is nothing more than gut feeling, but I’m wondering if he’s saving some sort of massive investment in education or early childhood development for the state of the union to draw attention to it. I guess we’ll know soon enough. I’m not really sure what to think of the housing plan, mostly because I’m not sure of how to balance the need for home prices to fall further, which everyone seems to agree on, with the desire to help those who aren’t entirely lost causes to stay in their homes. There’s been some praise for it, even if it’s been lukewarm. The biggest issue I have with him and his team so far is the banking plans: there seems to be a quickly growing consensus that nationalization/pre-privatization/pre-packaged bankruptcy/whatever you want to call it will be necessary for at least a few of the major banks in the short term. The Obama administration probably knows this, but seems reluctant to face reality and eager to delay the inevitable. Or maybe, as some have suggested, the vague qualities of the announced plan, in addition to being unclear because major portions were scrapped at the last minute because they were obviously weak, is intended to not cause more anxiety in the markets.

I don’t know that I would characterize this as a bad start, I just think it’s too soon to tell. Regardless, what would you guys, specifically Tyler, have done? You seem reluctant to support a stimulus for a few different reasons, for instance, so I’m not sure it’s right to criticize something you wouldn’t have supported no matter what form it took.

I’m with you guys on the “Buy American” provisions and stuff like that, but it hardly seems like he’s trying to pull back from our trading partner, whether it’s Canada or Mexico.

As for the idea that most liberals hate Mexicans? Get real.

12 dennis February 20, 2009 at 12:50 pm

In 1980 the U.S. Federal Government launched the National Acid Precipitation Assessment Program (NAPAP) which eventually employed 700 scientists and cost upwards of $500,000. After 10 years of careful study, NAPAP found that the effect of acid rain, while real (those pollutants could combine with moisture in the air to form a weak sulpheric acid solution), the effect on forests and crops was negligible. The study also found that the Nation’s lakes and streams were in much better condition than the EPA and other critics had asserted. In fact the study found that among thousands of U.S. lakes, only 4 percent were somewhat acidic. One-quarter of those were acidic due to natural causes, leaving only 3 percent somewhat influenced by human activities.
The study found many of the Adirondack lakes (an important subset of the crisis stories) were acidic when explorers first entered the region, and likely contained few fish at the time. Logging (and burning) the virgin forests prior to 1900 reduced the regional lake acidity. Acidity then rebounded with the decline of logging. It is well known that glacial-influenced, granitic soils are typically acidic and that the representative Adirondack soil is about pH 3.4(1.0 being very acidic and 7.0 being very basic). Runoff from such soils will of course collect in local surface water.
Among the many findings of the NAPAP study (and others in the U.S., Europe, and elsewhere in the world) were that acid rain attributed to man-caused sources were generally local in nature, not carried large distances from concentrated industrial sources.
The Final Report of NAPAP was never published and received very little attention from either the media or the politicians (who had already created a draconian Clean Air Act based on the fear and innuendo rather than the science that had cost them (and us) a half a billion dollars). Interestingly, the EPA still pushes the acid rain story on its website and sites aimed at schoolchildren extolling the same message abound.

13 Mark February 20, 2009 at 1:23 pm

The softwood lumber dispute highlights what NAFTA really is: free trade til the Americans say it isn’t.

As for concerns with Albertan oil, Canadian oil leaves a larger ‘carbon footprint’ while Middle Eastern oil leaves a larger ‘terrorist footprint’. Obamaists are making an interesting choice. That, or they haven’t discovered cognitive dissonance.

14 Mr. Econotarian February 20, 2009 at 8:47 pm

Oh no, under the “new NAFTA”, will the US have to match Mexican labor law?

Fixed-term contracts will be prohibited for permanent tasks
There will have to be restrictions on night and “weekly holiday” work
Annual paid vacation for an employee with 20 years of service must be at least 20 days.
To terminate redundant workers, government approval will be required, and priority rules will apply to redundancies and re-employment.
Severence pay for a worker of 20 years employment will be a year’s salary.

(source: http://www.doingbusiness.org)

[By the way, why didn’t NAFTA also deal with importing-to-manufacture-exports? You still need special maquiladora permits to do that duty-free]

15 ben February 21, 2009 at 2:54 am

“Ben you said, “Making noise about renogetiating NAFTA isn’t a big deal, NAFTA had very little effect on US-Canada trade anyway”. Care to show where you’re getting your information? Because that would fly in the face of every single study on U.S-Canada FTA & NAFTA.”

My understanding is that NAFTA has had a significant impact on US-Mexico trade and Mexico-Canada trade, but that restrictions on the things that Canada and the US trade with each another were trivial or non-existent prior to NAFTA. If there is evidence to the contrary I would very much appreciate being pointed to it.

16 Paul Johnson February 21, 2009 at 4:31 pm

Putting NAFTA renegotiation ‘on the agenda’ is a way to save face with the electorate. It’s not going to happen. The Mexican and Canadian electorates would never accept it.

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