The protectionist promises of the two remaining liberal presidential candidates continue to upset our ally to the north. The Toronto Star‘s David Olive reports that Jim Flaherty, the Canadian finance minister, has come close to “recommending a tutorial for the Democratic presidential aspirants.” Olive continues:
By Ottawa’s reckoning, NAFTA accounts for seven million U.S. jobs. … Ohio, for instance, enjoys a $3.3 billion merchandise trade surplus with Canada on more than $33 billion in cross-border trade.
But there have been losers, concentrated in the industrial heartland of Canada and the U.S. Ontario, too, has lost an estimated 175,000 manufacturing jobs in recent years. Yet it’s difficult to pin the blame on free trade.
Canada’s GDP growth and job creation have accelerated more rapidly in the years since NAFTA was signed than in the 14 years before. Mexican GDP has grown at a robust average annual 3.5 per cent between 1994 and 2006. And the U.S. unemployment rate has dropped from an average annual 7.1 per cent in the 13 years prior to NAFTA to 5.1 per cent since 1993, a period in which the U.S. created 25 million new jobs.
If anything, trade still isn’t free enough, as shown by Canada’s disputes with the U.S. over softwood lumber and cattle exports. U.S. agricultural goods flooded into Mexico after NAFTA, putting countless independent Mexican farmers out of work in part because non-tariff health and other barriers kept their goods out of the U.S.
