June 25, 1997

It's beginning to look as though we are in a major realignment of the parties. The decisive political battles are no longer between Democrats and Republicans, but between those who have adopted a global world view against those who hold fast to a national world view.

The global world view puts winning world markets as our overriding policy goal, and free trade across open borders as the means of getting there. Profits are up and stockholders are happy when corporations can shift production to countries where they are not bothered by child labor laws, environmental restrictions, or EEOC demands that they hire and retain the mentally handicapped.

Nationalists, on the other hand, resonate to concepts such as sovereignty, patriotism, American jobs, and national security in military, economic and moral venues. They don't empathize, for example, with the president of that once quintessential American company, Boeing, who boasts that he now heads a global company in an era of global markets.

The passage of NAFTA in 1993 was a major example of the new bipartisan globalism, Although the grass roots of both parties opposed NAFTA, it was rammed through by the Clinton Administration working with the Republican leadership in Congress.

Four years later we learn, courtesy of ABC Nightline, that the Clinton Administration's Drug Enforcement Agency covered up vital information that might have made a difference in the close NAFTA vote. Mexican drug traffickers were buying up legitimate businesses in northern Mexico to use as fronts in order to truck cocaine and heroin into the United States as soon as NAFTA passed.

Safety is another facet of the truck problem because Mexican trucks are older, heavier, less insured, and have brakes, tires and emissions that don't comply with U.S. standards and drivers who work for as little as $7 a day. In one day, ABC news investigators counted 2,366 Mexican trucks crossing the border, of which only nine were inspected for safety violations.

Then, CBS 60 Minutes documented how Mexican drug lords paid off U.S. border officials to look the other way when Mexican trucks rolled across the border.

The compelling argument used by the NAFTA salesmen was that Mexico would become a tremendous market for U.S. goods, and that a growing trade surplus would generate hundreds of thousands of new American jobs. The Clinton Commerce Department peddled the formula that 20,000 jobs would be created for every $1 billion in trade surpluses.

The results have been devastating. Our pre-NAFTA trade surplus with Mexico of $1.7 billion has turned into a post-NAFTA trade deficit of $16 billion. Our pre-NAFTA trade deficit of $10 billion with Canada, our other NAFTA partner, has turned into a $22 billion trade deficit.

That's a NAFTA trade deficit of $39 billion and, under the Commerce Department formula, every billion translates into 20,000 U.S. jobs lost. Yet Clinton and the globalists are trying to expand NAFTA on a fast track to other Latin American countries.

The party realignment continued when the globalists of both parties rammed through the GATT/WTO Treaty in a lame duck session in November 1994, knowing that it would never pass if it were voted on by the newly elected Republican 104th Congress. Neither NAFTA nor GATT would pass if brought up today.

The globalists, of course, are eager advocates of Most Favored Nation (MFN) status for China. China is the world's biggest market, right? But it's not a market if customers don't buy, and 16 years' experience with MFN has given us an annual trade deficit of $40 billion.

The imminent vote on MFN for China will continue the party realignment. On the one side, we have Bill Clinton and Newt Gingrich, with Trent Lott still a question mark; on the other side we have Dick Gephardt, most grassroots Republicans, and working men and women.

Harvard economist Dani Rodrik points out in his new book, "Has Globalization Gone Too Far?", that free trade is very costly. American workers who don't lose their jobs to low-cost foreign labor must not only bear the burden of foreign competition, but also of increased taxes to pay for social services for the displaced workers, while the multinationals are able to flee their tax obligations.

"The social welfare state is the flip side of the open [free trade] economy," Rodrik says. He isn't a protectionist; he just appears to be an honest free trader who admonishes us to face up to the price we're paying.