Remember the "giant sucking sound" that H. Ross Perot warned us about? The time was the early '90s, when Perot was running for president. The economy was stuck in a jobless recovery, and Perot's message about the perils of free trade— including jobs lost to Mexico—resonated powerfully with voters. Even so, Perot lost both the election and the battle to derail the North American Free Trade Agreement (NAFTA). The election's winner, Bill Clinton, later signed the treaty into law, and NAFTA took effect in 1994.
That's not the end of the story, however. As the economy stalls and fears of job loss mount, free trade is back on the political agenda. In recent months, Sens. Clinton and Obama have both publicly criticized the agreement and pledged to renegotiate the treaty if elected.
NAFTA, of course, is only one of the many trade treaties to which the United States is a party. In the past two decades, the United States has signed similar pacts with more than a dozen other countries, and it's in the process of negotiating bilateral or multilateral agreements with at least a dozen more. But the going is getting tougher all the time. Just recently, a trade agreement with Colombia ran into mighty rough seas in Washington.
On the surface, this might seem to have little to do with the logistics and supply chain world. But as I see it, nothing on this election year's list of issues is more important to you and your business than trade policy.
My guess is most of you support what we call free and fair trade. You probably believe, as I do, that free trade generally benefits everyone involved and—more to the point, perhaps—that free trade is very good for the logistics, material handling, and shipping companies that facilitate commerce throughout the world. And if you do, it behooves you to speak out—loudly and clearly.
It won't be easy, however. The issue of free trade has inspired impassioned opposition, and emotion tends to get in the way of the facts. But in this case, the facts are hard to argue with. Take these statistics from a policy paper released in April by the Canadian-American Business Council on the "substantial economic gains" generated by NAFTA. "Between 1993 and 2007," it says, "trade among the NAFTA partners has more than tripled, toUS$930 billion a year from US$297 billion a year. When NAFTA came into force in 1994, the combined gross domestic product for the three countries was US$6 trillion among a total population of 360 million. ... Last year, the three countries' total GDP was US$15.8 trillion with a population of 445 million," the report noted. (To read the full report, go to www.canambusco.org and click on "CABC Policy Paper: The Economic Benefits of NAFTA.")
Today, Canada is the biggest export market for U.S. goods—bigger than China, Germany, Japan, and the U.K. combined. Couple that with the remarkable success of the maquiladora program and other trade initiatives with Mexico and then listen. What do you hear? Sounds like success to me.
If you present them with the facts, most people will come to see what huge economic benefits derive from free and fair trade agreements. The problem, of course, is getting people to listen to the facts. As opposition to NAFTA—and international trade in general—mounts, it's critical that we find a way to make ourselves heard above the din. It's in the world's best interests, America's best interests, and in our own business interests that we don't let demagogues make all the noise.