Imagine how frustrating Santa’s job would be if he had to go through customs on Christmas Eve and pay tariffs. His bag of gifts wouldn’t be quite so big–and our stockings wouldn’t be quite so stuffed.
That’s worth bearing in mind as we approach January 1, 2008, when the final provisions of the North American Free Trade Agreement are scheduled to take effect. All of the remaining tariffs and quotas between the United States, Canada, and Mexico will be wiped away.
Unfortunately, some of the presidential candidates have taken this opportunity to attack NAFTA as a gigantic blunder, rather than praise it as one of President Clinton’s finest achievements. Even Hillary Clinton is pandering to the protectionists. “NAFTA was a mistake to the extent that it did not deliver on what we had hoped it would,” she recently said. She has called for NAFTA to be “adjusted,” by which she presumably means the re-imposition of some tariffs.
Other Democrats have echoed her criticisms of free trade, and so have Republicans such as Mike Huckabee and Ron Paul.
They all deserve lumps of coal in their stockings because NAFTA and free trade have enriched our economy and improved our quality of life. Today, our continent is the world’s largest free-trade area, home to more than 440 million people whose combined gross domestic product is more than $15 trillion.
Since 1994, when NAFTA became a reality, U.S. exports to Canada and Mexico have grown by 157 percent. Within NAFTA, Canadian and Mexican exports also have grown by 173 percent and 392 percent respectively. It proves that economics aren’t a zero-sum game–the pie has grown for everyone, which means that everyone has benefited.
Enjoying access to markets in Canada and Mexico, as well as in China, Japan, and Korea, means that Americans are able to put more under the Christmas tree. Economists at the Peterson Institute recently determined that expanded trade boost income for the average U.S. household by $10,000 each year.
That’s a lot of Christmas presents–too much, you might even say.
Isn’t Christmas supposed to be about more than materialism? It’s about faith and family, too, and the benefits of free trade also go to them. Free trade makes more money available for charitable donations. It helps families afford college tuition, add a bathroom or replace a worn-out minivan.
These are concrete benefits, but they’re often invisible. As Gary Clyde Hufbauer and Paul L. E. Grieco of the Peterson Institute explained in the Washington Post, “Americans do not receive this money as a check marked ‘payoff from globalization.’ Instead, the payoff is hidden within familiar channels: fatter paychecks, lower prices, and better product choices.”
Our prosperity is such that the poorest Americans live with more compared to where they were a generation ago. According to the Heritage Foundation, the Census Bureau officially classifies 37 million Americans as “poor”–and 43 percent of them own their own homes, 80 percent possess air conditioning, 78 percent own DVD or video-cassette players, 62 percent have cable or satellite TV, and 89 percent own microwave ovens.
Many factors explain this, from technological innovations to the power of capitalism. Free trade plays an important role as well, with its ability to increase jobs through exports and decrease consumer prices through competition.
Two-thousand years ago, the Magi traveled great distances to bring their gifts to a family so poor that it was living, at least temporarily, in a stable.
This Christmas, let’s honor their generosity–and also remember that they had to cross borders to express it.
Bill Horan, a Board Member for Truth About Trade and Technology, grows corn, soybeans and grains in Northwest Iowa. This fourth generation family farm has been involved in specialty crop production and identity preservation for over twenty years.