|
Washington: Politicians who blame free trade for manufacturing job losses in the US are misleading the American public, the Bush administration's chief trade negotiator said.
"We do our citizens a disservice if we pretend that trade is the cause of econ-omic evils," US Trade Representative Susan Schwab said on Monday. "You have to wonder what kind of scapegoating is going on here."
Both Democratic presidential contenders Barack Obama and Hillary Clinton have stepped up their criticism of the North American Free Trade Agreement (Nafta) before the March 4 primary in Ohio, where Nafta is often blamed for manufacturing job losses.
Schwab said she did not want to comment on the campaign, but defended Nafta and the Uruguay Round world trade agreement, which were both approved by Congress in the early 1990s during Bill Clinton's presidency.
The two agreements led to higher US economic growth and employment in the 10-12 years after they were approved, compared with the same period before, she said.
Despite claims that Nafta has caused large job losses, US manufacturing output has increased more than 125 per cent since the trade pact between the US, Mexico and Canada went into force in 1994, Schwab said.
"It's just that productivity enhancements and technological changes have meant you have fewer workers engaged in manufacturing," she said.
Undermine
"If you're pretending trade is the cause [of job losses] and therefore trade policy is the solution ... then you really are undermining your own capacity to build a competitive economy in a globalised world."
The way to create and keep jobs in the US is through tax and other macro-economic policies that encourage business investment, she said.
Both Clinton and Obama have proposed fixing Nafta by incorporating stronger labour and environmental provisions into the pact, and changing investment provisions that critics say favour corporate interests too much.
Schwab, noting Nafta is one of the United States' oldest free trade agreements, said it would be possible to update it. But to do that, the next administration would probably need Congress to renew trade promotion authority, she said.
That legislation allows the White House to negotiate agreements that it can submit to Congress for a straight up-or-down vote, without any changes.
Neither Clinton or Obama has made renewing the legislation a priority.
Schwab also expressed doubt that amending Nafta would satisfy critics of the agreement.
Defence: Inflationin focus
A top Federal Reserve official has defended the central bank's emphasis on core inflation, saying an emphasis on less volatile prices produces a stronger economy in the long run.
"Stabilising core inflation ... leads to better economic outcomes than stabilising headline inflation," Frederic S. Mishkin, San Francisco Federal Reserve Governor, said in a speech at East Carolina University late on Monday.
- Reuters
|
