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Thinking the Unthinkable: Could America Repeal NAFTA?

Jun 01, 2010 | Updated May 25, 2011

Four congressmen have now moved a bill to repeal NAFTA. Superficially, this means little, as passage of this bill is unlikely in the near future. But more fundamentally, it means a lot, because, unbeknownst to most Americans inside and outside the Washington Beltway, free trade is inexorably losing its base of support on Capitol Hill.

This means, for a start, that President Obama's recent brave-faced pledge to move forward with his proposed Trans-Pacific Partnership (interestingly, the dread phrase "free trade agreement" has been carefully left out of the name) is, quite likely, dead on arrival. Obama himself may know this, and may have staged this gesture simply to placate foreign nations and domestic corporate interests.

The lack of any change on trade issues in the Oval Office has distracted most Americans from the fact that in recent years, there has been an inexorable movement away from free trade in the House and Senate, driven by the public's relentlessly rising skepticism of free trade. For example, according to one analysis by Global Trade Watch, no fewer than seven Senate and 30 House seats flipped from pro- to anti-free trade in the 2006 election. Seventy-three percent of winning Democratic candidates in that election emphasized trade as an issue in their campaigns, while 72 percent of losing Democratic candidates did not. Not a single candidate of either party ran on free trade as a positive agenda, and not a single opponent of free trade was ousted by a free trader, in either the House or the Senate. Six anti-free-trade Democrats -- Sherrod Brown of Ohio, Claire McCaskill of Missouri, Jon Tester of Montana, Bob Casey of Pennsylvania, Sheldon Whitehouse of Rhode Island, and Jim Webb of Virginia, plus Independent Bernie Sanders of Vermont -- captured seats formerly held by free traders.

This trend continued in 2008. Thirty-six new free-trade opponents were elected to the House: 13 in contests against incumbents, 20 in battles for open seats, and three in special elections. (Eight free-trade opponents lost, so the net gain was 28.) And seven new free-trade opponents were elected to the Senate: Mark Begich of Alaska, Mark Udall of Colorado, Jeanne Shaheen of New Hampshire, Tom Udall of New Mexico, Kay Hagan of North Carolina, Jeff Merkley of Oregon, and Al Franken of Minnesota. This is mainly, but not exclusively, a Democratic trend: the 2008 winners also included 10 Republican opponents of free trade who either held or won seats while campaigning against free trade.

Oddly enough, given the condemnations of "protectionism" issuing from the Democratic leadership, this trend seems to be a big winner for the Democrats. For example, after the 2006 election, it was estimated that another 10 to 20 Democratic challengers might have won, if they had attacked free trade. But the Democratic Congressional Campaign Committee was headed by Rahm Emanuel (now President Obama's chief of staff), a free trader. Emanuel played a leading role in securing Democratic votes to pass NAFTA in 1993 while serving as a staffer under Bill Clinton and decided not to use the issue. But for this decision, Lois Murphy, to take only one example, might well have beaten Jim Gerlach, rated by nonpartisan observers as one of the most vulnerable Republican incumbents in the nation, in Pennsylvania's 6th district.

Instead, Gerlach squeaked back in with 1.2 percent of the vote after the DCCC effectively vetoed a trade-oriented get-out-the-vote program. But people noticed. So after declining to run ads attacking free trade in 2006, the DCCC, startled by the issue's potency even when neglected, relented and aired spots on the issue in 2008. The main thing currently impeding an even stronger response in the voting booth is simply how deeply conflicted the public's dislike of free trade is. According to one 2006 poll

The public...seems frustrated about where to place responsibility. Close to eight in 10 (78 percent) say the government could do something about protecting American jobs. But a majority (52 percent) do not think it's realistic for the government to control cor-porate outsourcing.

So the voters register their protests when given the chance, but otherwise remain stymied in their attempts to crystallize an opinion of what solution they ultimately want. The most puzzling thing about recent public opinion polls is that while the economy consistently ranks high on voters' priority lists, trade per se does not, suggesting that voters have yet to become fully convinced that free trade, as opposed to other currently-hot issues like our broken financial system, is the root cause of America's economic ills.

But if trade is at least a big part of the cause, then presumably this will eventually tell upon public opinion and trade will move up voters' priority lists. This will, if recent trends are any indication, find expression at the polls and drive Congress even further away from free trade. And if nothing stops this trend, not only will it remain impossible to pass new free trade agreements, but existing ones will become vulnerable, with NAFTA the biggest and most obvious target. NAFTA repeal by 2018 is easily a 50-50 possibility at this point.

Ian Fletcher is the author of Free Trade Doesn't Work: What Should Replace It and Why. He is an Adjunct Fellow at the San Francisco office of the U.S. Business and Industry Council, a Washington think tank founded in 1933. He was previously an economist in private practice, mostly serving hedge funds and private equity firms. He may be contacted at atian.fletcher@usbic.net.