Where Have All the Leaders Gone? by Lee Iacocca, Catherine Whitney Page A
Authors: Lee Iacocca, Catherine Whitney
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say it was gutsy of Clinton to call on me. A lot of people said I was a protectionist, but Clinton realized that I’d never been a protectionist. All I’d ever asked for was that trade agreements be fair. Show me a plan that’s fair and beneficial, and I was on board. The protectionist in this debate was Ross Perot, who was appealing to everyone’s fears about losing jobs. Ross said we’d hear a “giant sucking sound” of jobs leaving America for Mexico. He was scaring American workers to death about NAFTA. That’s where I came in, I guess. Clinton figured I was a credible voice on trade issues. The only thing he had to do was convince me.
To a lot of people’s surprise—including mine —Clinton did sell me on NAFTA. When you think about it, what could make more sense than a trade agreement with our closest neighbors that included a common commitment to resolving environmental and labor issues? The goal of NAFTA was to improve economic, environmental, and trade conditions in Canada, the United States, and Mexico. The improved economic conditions and open markets would generate more jobs, not fewer. That was a program I could support, and I helped Clinton sell NAFTA. The bill passed in 1994.
A lot of people have asked me, if I had to do it all over again, would I support NAFTA? While NAFTA has had some positive trade benefits on paper, it’s hard to call the agreement a roaring success. The ideal of NAFTA—to set in motion a collaborative process in our corner of the world, where trade would not only be free, but also fair —was noble enough. But NAFTA has yet to fulfill its goal of attracting other countries to our south, such as Argentina, Brazil, Chile, and, yes, even Venezuela. In the long run, that will need to happen to make NAFTA viable. And it’s hard to ignore the continued decline of U.S. manufacturing, which hasn’t been stemmed by NAFTA.
The big question when it comes to trade is how we acknowledge global realities and move forward, without destroying our competitive edge. Free trade is one of the fundamental principles of our capitalist economy, but America has a bad habit of giving away the store.
FREE TRADE HAS TO BE FAIR TRADE
For more than twenty years, I have been preaching the primary rule of free trade: It must be fair. For the most part, my words have fallen on deaf ears, because the trade imbalance is just getting worse. It’s currently at around $800 billion—over three quarters of a trillion dollars. That’s how much more we’re importing than we’re exporting. This is happening because the United States has thrown our market wide open to anyone who wants to set up a booth. We worship at the altar of free trade, and it’s killing us. At the very least, it’s time we started charging admission to the American market. And the price of a ticket has to be a little fairness and reciprocity.
It might interest you to know that President Bush says there’s no reason to be alarmed about the trade deficit. He says other countries will always be happy to lend us the money to finance our deficit. Is this our trade policy? If so, we are, to quote Bush’s father, in deep doo-doo. Because the bill will come due, you can bet on it. As the trade imbalance grows, our influence in the world shrinks.
Bush’s father took the trade imbalance a lot more seriously when he was President. Near the end of his term, I was part of a team accompanying him on a high-profile trip to Japan. Our mission was to urge the Japanese to open up their markets to American products and balance the trade deficit—most of which was accounted for by cars and parts. The previous year American car companies had sold a measly 32,000 cars in Japan, while Japan had sold more than 2.5 million cars in America. Furthermore, for all their talk about building plants in the United States and providing jobs for Americans, Japanese car companies were still shipping most of their parts and components from Japan.
We
To a lot of people’s surprise—including mine —Clinton did sell me on NAFTA. When you think about it, what could make more sense than a trade agreement with our closest neighbors that included a common commitment to resolving environmental and labor issues? The goal of NAFTA was to improve economic, environmental, and trade conditions in Canada, the United States, and Mexico. The improved economic conditions and open markets would generate more jobs, not fewer. That was a program I could support, and I helped Clinton sell NAFTA. The bill passed in 1994.
A lot of people have asked me, if I had to do it all over again, would I support NAFTA? While NAFTA has had some positive trade benefits on paper, it’s hard to call the agreement a roaring success. The ideal of NAFTA—to set in motion a collaborative process in our corner of the world, where trade would not only be free, but also fair —was noble enough. But NAFTA has yet to fulfill its goal of attracting other countries to our south, such as Argentina, Brazil, Chile, and, yes, even Venezuela. In the long run, that will need to happen to make NAFTA viable. And it’s hard to ignore the continued decline of U.S. manufacturing, which hasn’t been stemmed by NAFTA.
The big question when it comes to trade is how we acknowledge global realities and move forward, without destroying our competitive edge. Free trade is one of the fundamental principles of our capitalist economy, but America has a bad habit of giving away the store.
FREE TRADE HAS TO BE FAIR TRADE
For more than twenty years, I have been preaching the primary rule of free trade: It must be fair. For the most part, my words have fallen on deaf ears, because the trade imbalance is just getting worse. It’s currently at around $800 billion—over three quarters of a trillion dollars. That’s how much more we’re importing than we’re exporting. This is happening because the United States has thrown our market wide open to anyone who wants to set up a booth. We worship at the altar of free trade, and it’s killing us. At the very least, it’s time we started charging admission to the American market. And the price of a ticket has to be a little fairness and reciprocity.
It might interest you to know that President Bush says there’s no reason to be alarmed about the trade deficit. He says other countries will always be happy to lend us the money to finance our deficit. Is this our trade policy? If so, we are, to quote Bush’s father, in deep doo-doo. Because the bill will come due, you can bet on it. As the trade imbalance grows, our influence in the world shrinks.
Bush’s father took the trade imbalance a lot more seriously when he was President. Near the end of his term, I was part of a team accompanying him on a high-profile trip to Japan. Our mission was to urge the Japanese to open up their markets to American products and balance the trade deficit—most of which was accounted for by cars and parts. The previous year American car companies had sold a measly 32,000 cars in Japan, while Japan had sold more than 2.5 million cars in America. Furthermore, for all their talk about building plants in the United States and providing jobs for Americans, Japanese car companies were still shipping most of their parts and components from Japan.
We
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