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Is NAFTA good for democracy? Yes, but maybe to the distress of some progressive critics

By Jock O'Connell

This article appeared in the Sunday Forum section of the Sacramento Bee on March 23, 2003.

There is no question that globalization - in its many varied aspects, not merely the economic dimension that Jeff Faux emphasizes in his article at left on this page - is putting enormous stress on social and political institutions all around the world.

Continual enhancements in international transportation systems over the years, coupled with the advent of new communications technologies like the Internet, e-mail and cell phones (even more ubiquitous in Asia and Europe than they are here) now permit people, goods, capital, information and the occasional gesture of ill will to move fluidly - too fluidly, perhaps - around the world.

One result, not surprisingly, is that the historical significance of national boundaries is being steadily eroded. The globalization phenomenon has given rise to some intriguing but also discomforting discussions about the need to rethink many of our conventional notions of nationality in this increasingly intertwined international community.

Princeton University moralist Peter Singer goes as far as to pose the question in his new book, "One World: The Ethics of Globalization," whether national sovereignty itself has an "intrinsic moral weight" when "more and more issues increasingly demand global solutions."

Debating the virtues of nationalism is, of course, not something most Americans, let alone our public officials, are anxious to do when this nation is at war in the Middle East and when anti-aircraft missiles batteries are parked next to the Washington Monument. (It may, though, be an appropriate topic for those Sunday morning interview programs which lately have featured pundits droning on about something called "nation-building" in regions populated by people whose real loyalty is to their villages, clans and tribes.)

But it is not merely the sovereignty of the nations that looks to be at stake as the world knits itself into a tighter and more elaborate tapestry. Closer to home, worries about what global economic integration might imply for state and local governments have surfaced at the state Capitol in recent years as legislators became more informed - and in some cases alarmed - about the terms of international trade agreements into which the United States had been entering.

In January 2001, a bipartisan group of 14 California legislators co-signed a letter to U.S. Trade Representative Robert Zoellick. In it, the lawmakers opined that the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) "diminish the sovereignty of states such as California and, in so doing, shift decision-making power from elected officials to unelected international trade officials."

Of special concern was the status of those California laws and regulations safeguarding the environment and upholding the interests of workers and consumers that differed from federal standards. The letter's writers - Sacramento Assemblyman Darrell Steinberg among them - also wondered whether government procurement practices which give preferences to veterans, the disabled, women and minorities would pass muster under WTO rules. After all, how could a Japanese or German company compete on an equal basis for a state contract when California gives a bidding edge to firms run by veterans of service in the American military?

In replying, Zoellick essentially dismissed the legislative missive with sweeping assurances that the Bush administration had no intention of negotiating away U.S. sovereignty or compromising America's federal system of government. But those assurances, critics complain, have not tempered Zoellick's aggressive pursuit of further trade agreements containing the very same provisions that originally prompted the legislators' concern. In the words of Anne Blackshaw, a state Senate consultant, the trade accords Zoellick has been negotiating of late "do not regulate businesses so much as they regulate governments' ability to regulate business."

Jeff Faux's essay seeks to address a somewhat larger and more fundamental issue posed by economic globalization - the growing disconnection between the global marketplace and the policymaking apparatus by which national governments have traditionally regulated and policed the marketplace within their own borders. As more and more corporations organize themselves to conduct business transnationally, the question of how to oversee the activities of these businesses becomes more complex and urgent.

Referring specifically to NAFTA, Faux asks: "How will this new political economy be governed, and in whose interest?" As with other skeptics of globalization, he is troubled that multinational corporations may be able to operate in a laissez-faire business climate beyond the legal jurisdiction of any one legitimate national authority. (He clearly lacks confidence in the American legal profession, whose ingenuity in discovering ways of bringing suit against anyone, anywhere for almost any reason is legendary.)

Faux, it should be noted, was a co-founder of the Economic Policy Institute, a Washington think tank closely associated with organized labor. In writing for the American Prospect - the magazine in which his article originally appeared - Faux is preaching to a choir he himself describes as the "progressive" or "social-democratic" left. Probably for that reason, he regrettably lapses into intellectual short-hand, fashioning his argument from the familiar slogans of previous debates and drawing from a list of old canards aimed variously over the years at capitalism, free trade, and now globalization.

Thus, he laments how "American and Canadian corporations have moved production and jobs south to take advantage of cheap Mexican labor." But it's not clear what bothers him more: that non-unionized Mexican workers got a lot of unionized American jobs or that faceless corporations have presumably been raking in huge profits by playing an elaborate international game of musical chairs with people's jobs. It's a toss-up. The latter certainly grates acutely on Faux's ideological bias, even though his populist - indeed, nationalist - heart definitely regrets that American workers lost good jobs to foreigners.

Consider next Faux's contention that U.S. companies unfairly use the threat of moving production to Mexico or even farther offshore to leverage wage concessions from their employees and wheedle tax and regulatory relief from state and local governments in the U.S. NAFTA, he writes, "is a potential battering ram aimed at destroying domestic protections that temper modern capitalism."

Faux is, of course, right to suspect that big business is probably up to no good. After the ceaseless cascade of corporate scandals the past couple of years served to reveal how many of the chieftains running U.S. companies have been crooks, thieves, embezzlers and incompetents, who can really argue with the contention that corporate America should not be trusted with the nation's welfare? That animal depicting the true nature of Wall Street these days is neither a bull nor a bear, but a rather mangy weasel.

Still, it is when Faux offers up his solutions for the wrongs he perceives in global trade that he reveals that strange brew of elitism, disingenuity and naivete not altogether uncommon among his progressive audience.

To prevent companies from abusing treaties like NAFTA, Faux evidently wants our trading partners to agree to abide by roughly the same social, labor, environmental and other regulatory constraints that we have here in America. In other words, he would like to deprive U.S. companies of any incentive to move away, and he presumably wants countries like Mexico - whose chief comparative advantage is precisely their more congenial regulatory regimes and a lower cost of doing business - to accede to this gambit. Fat chance, Jeff.

Faux similarly urges that entities like NAFTA and the WTO be governed by a democratic rule-making process and a transparent system for adjudicating disputes, both answerable to "the people." While there is fairly widespread support for just that prescription, a reader of Faux's essay might justifiably ask whether Faux and his progressive colleagues would really be satisfied if "the people" were to support something other than those environmental, worker rights and animal protection measures progressives prefer.

What Faux's crowd really seems to demand of these proposed transnational democratic institutions they profess to desire are not outcomes arrived at democratically but outcomes that merely affirm their own policy ideals.

Notwithstanding a rhetorical head-fake or two in favor of democratic processes, Faux must certainly appreciate that, in a truly democratic international rule-making body, America is a relatively small constituency, and there are few guarantees that the more populous poorer countries might not opt to overlook a host of environmental and social policy safeguards for the sake of more rapid economic growth.

Most remarkably, Faux tacitly ignores how poorly his goals have been served of late by the democratic process here in the U.S. For while many of Faux's progressives feigned to see no difference between Democratic and Republican presidential candidates (and instead mostly cast their ballots for an eccentric narcissist named Ralph Nader), the bad guys stole home!

As a consequence, Faux and his allies will have a difficult time persuading other nations to strengthen their environmental protection laws or more vigorously enforce worker safety rules when our own government is now fast and furiously moving in the opposite direction.

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