NOT All Politics Is Local

As difficult as it may be, to assess the success of some policies you have to look at the biggest picture available. Such is free trade and in particular NAFTA:

When President Bush and Mexican President Vicente Fox sit down together today at the Summit of the Americas in Monterrey, Mexico, they might begin with a toast to the North American Free Trade Agreement. The treaty turns 10 this month and, despite protectionist bellyaching, a decade of closer commercial ties across our shared 2,000-mile border has been a boon to both nations.

….Nafta visionaries in the U.S. went out on that limb for good reason. Mexico’s authoritarian political system, repressed economy and resulting poverty were creating problems that could not be contained at the border in perpetuity. Mexican instability would eventually spill over the Rio Grande. The choice was easy: Either help Mexico develop as part of an integrated North America, or watch the economic gap widen and the risks for the U.S. balloon.
By this measure alone Nafta has been a success. In less than a decade the openness of free trade helped promote monumental changes in Mexican politics, and in its economy and financial system. Greater transparency in almost all facets of governance means that Mexico is far more stable today than it was 10 years ago. It has also made for exponentially better U.S.-Mexico relations, and for a more promising North American future.

….The economic shock of trade competition has in turn helped open Mexican politics. In July 2000, what Peruvian novelist Mario Vargas Llosa had famously called the “perfect dictatorship” finally came to an end. Mexicans elected their first president from outside the Institutional Revolutionary Party (PRI) in 70 years. Mexican elections at the national and state level are now considered free, fair and highly competitive.

Political accountability provoked yet another advance. When Mr. Fox took office in December 2000, there was no mega-devaluation of the peso as there had been in the presidential years 1976, 1982, 1988 and 1994. The drivers of this historic non-event were unmistakably related to Nafta. That is, pressure to attract foreign investment had forced Mexico to open its books, and at Mr. Fox’s inauguration there were no monetary or fiscal surprises.

Under Nafta, Mexican businesses–notably the Monterrey elite–had new incentives as well. They became importers of components and machinery for production as well as exporters. Their transactions were now in dollars. Open markets changed the dynamics of a currency play that once had Mexican producers lobbying the government for a weaker peso.

Free trade efficiencies have also boosted North American economic growth. According to Dan Griswold at the Cato Institute’s Center for Trade Policy Studies, “since 1993, the value of two-way U.S. trade with Mexico has almost tripled from $81 billion to $232 billion, growing as fast as U.S. trade with the rest of the world.”

….”The small outflow of direct manufacturing investment to Mexico has been overwhelmed by the net inflow of such investment from the rest of the world,” writes Mr. Griswold. From 1994 to 2001, U.S. manufacturing companies invested an average of $2.2 billion a year in Mexican factories, in addition to the $200 billion invested annually in the U.S.

The U.S.-Mexico relationship still faces challenges–from water rights to crime and immigration. But the future is infinitely more promising now that we share a greater number of economic interests and political values. On those counts alone, Nafta has been a spectacular success. [WSJ]

The loss of a job due to outsourcing is a painful thing, but the benefits to the overall economy far outweigh the costs. And politically, if we are concerned about illegal immigration, we want conditions in those countries that are the greatest illegal immigration threats – and Mexico is by far the biggest – to improve so that people feel less compelled to leave.

Do you imagine that without the political and economic improvements in Mexico, and Mexican-US relations, made possible by NAFTA that Bush would be proposing a sweeping overhaul of American immigration policy, and that conservatives would be buying it?

So just what is the conservative case for immigration? President Bush made it well last week. He spoke of the American Dream and of the entrepreneurial spirit immigrants bring. He described the reality of global labor markets and asserted the need for policy that makes the most of them. He threw in a pinch of the liberal case for immigration, compassion for the least among us. But he also sounded some hard-headed practical strains–the homely conservatism of the stand-up leader determined to confront what isn’t working.
The fact is that the broken status quo is bad for all Americans, immigrant and native-born. Business suffers when it cannot find enough workers or must make do with an unreliable illegal flow. Immigrants suffer when they are penalized merely for showing up to work, forced to live underground and unable to assert even their most basic rights. American laborers suffer when immigrant employees who can’t bargain for better undercut prevailing wages and work conditions. Our democratic values suffer when we tolerate an all but permanent underclass without rights. And security suffers when we as nation cannot control our borders or even know who lives among us.

Pro-immigration conservatism recognizes this and sees that the all-important first step toward fixing it is accepting reality–the reality of the market-driven migrant flow. The Bush package does just that and endeavors to bring the entire influx above ground, acknowledging both those arriving now and those who came illicitly in the past by granting them legal status as temporary workers. Not only does this promise to put critical sectors of the economy back on a legal footing; it will also restore the rule of law in immigrant communities and enhance national security, freeing up border agents and other resources that can be devoted to fighting terrorism.

The Bush plan is marred by one critical flaw, one provision that does not live up to conservative values. As the president calculated, any plan that looks like an amnesty will never win the support of a majority of Republicans. But in bowing to those politics, he sacrificed two far more important imperatives: immigrant assimilation and the American ideal of a caste-free society. Temporary workers who cannot become citizens are by definition a caste apart, people whose very legal status means they can never be fully integrated into American life. The president’s plan doesn’t bar temporary workers from getting on the normal path toward citizenship–in fact, it removes legal barriers that would prevent them from doing so. But his package does not create enough of a bridge from one class to the other–from disposable hired help to full-fledged member of the American body politic. [WSJ]