Interpreting NAFTA : The Science and Art of Political Analysis, by Frederick W. Mayer

 

1. Introduction

In June 1990, Carlos Salinas de Gortari, president of Mexico, and George Bush, president of the United States, announced their intention to negotiate a free trade agreement between their countries. The general public paid little attention. Trade negotiations are generally not the stuff of headline news. Nevertheless, the event was a historic turning point, a break from the animosity and indifference that had always characterized U.S.-Mexican relations, and the beginning of an extraordinary three-year saga that would alter the political landscape of North America: the creation of a North American Free Trade Agreement (NAFTA).

This book is, first, a history of the saga, beginning with the decision to negotiate, continuing through two years of international negotiations, and culminating in the tumultuous battle in the United States to approve the agreement. It draws extensively on interviews, primary documents, press accounts, and the author's own experience as an aide to U.S. Senator Bill Bradley during the last 15 months of the NAFTA effort, in which capacity the author was responsible for managing the ad hoc whip effort to win Senate approval.

Second, this book is a political analysis of those events, an application of relevant theories of international relations, comparative politics, legislatures, organizations, interest groups, and public opinion. The analysis aims to answer three basic questions: Why did the nations of North America decide to negotiate? Why did the agreements take the form that they did? And, why was ratification so fiercely contested in the United States?

Finally, the book is an argument about the nature of theory for practical political analysis, where the goal is not to demonstrate the validity of general theories about politics but to explain an event and potentially to inform action in the event. It develops a broad theoretical framework that crosses between international relations and domestic politics and among rational choice, institutionalist, and symbolic constructivist approaches to analysis. It argues that to interpret NAFTA one needs to see it as simultaneously international and domestic, and at once about the politics of interests, institutions, and ideas.

A Brief History and Some Puzzles

In February 1990, Mexican officials asked the United States to consider negotiating a bilateral free trade agreement. In the United States, the Bush administration quickly agreed. Canadian Prime Minister Brian Mulroney's government at first decided not to join the talks, but after a summer's reflection, it changed its mind. By the end of 1990, all three governments had committed to negotiate a NAFTA. There are puzzles here.

Mexican politicians had long carefully distanced themselves from the United States. Suggestions throughout the 1980s that Mexico enter into a free trade agreement with the United States had been firmly rejected. The conventional wisdom was that no Mexican president would risk public censure from too public an embrace of the “colossus to the North,” yet little more than a year after taking office, Salinas was staking his presidency on just such an initiative.

For its part, the United States had just completed a free trade agreement with Canada, its largest trading partner. Most observers thought that it would be some time before the United States would be ready to add another member to the club. The thought that a free trade area including Mexico might be a high priority of the U.S. government, after decades of a foreign policy that ranged between belligerency and neglect, was hard to hold, yet the Bush administration eagerly embraced the idea.

Canada had gone through a grueling national fight during the 1987 national elections over the recently negotiated Canada-U.S. Free Trade Agreement (CUFTA). When the Canadian economy went into recession shortly after the election, the public blamed the CUFTA. The last thing that Prime Minister Mulroney wanted to do in 1990 was reopen the issue by embarking on another free trade negotiation. Yet by August 1990, the Canadian government had reversed its position and asked that it be allowed to join the talks. Given all this, why did Mexico, the United States, and Canada decide to negotiate?

With Salinas, Bush, and Mulroney in agreement, the NAFTA negotiation was born—almost. In Canada and Mexico, the head of state can commit his country to negotiate, but in the United States, the rules of the U.S. trade policy-making game in effect required the president first to obtain permission to negotiate from Congress. In the spring of 1991, President Bush asked for extension of authority to negotiate. Historically such requests had not been controversial, and most observers did not anticipate a problem this time. They were wrong. The fight in Congress became the hottest issue of the spring, with an unusual coalition of unions, environmental organizations, and other citizens' groups pitted against the business lobby and the administration in a battle that gave the first clear indication that NAFTA was not going to be trade politics as usual.

The president won the skirmish in May, but not before agreeing to address some of the environmental and labor concerns that the opponents had raised. The promise put new issues on the trade negotiating agenda, issues that would expand in importance as the NAFTA process proceeded. Why did the president feel compelled to link these new issues—environment and labor—to the trade agenda?

The NAFTA negotiations formally began in June 1991. The three governments had hopes that they would conclude quickly, perhaps by the end of the calendar year. After all, the basic form of the agreement had already been established in the CUFTA, and all three countries agreed on the final outcome of the negotiations: free trade. But these hopes soon proved unrealistic. The talks made little progress in 1991 and dragged on through the summer of 1992. Not until August, with the U.S. presidential election looming, did the negotiators finally reach an agreement—and then only after two weeks of intense final talks in Washington's Watergate hotel.

The final deal was a sweeping trilateral agreement to eliminate, over time, most barriers to trade and investment in North America and to strengthen intellectual property rights. The negotiators accomplished much of what they had set out to do. Yet questions remain about the particular form of the agreement. Why were some sectors of the economy excluded from the agreement altogether, and others given lengthy grace periods before the free trade agreement took full effect? What accounts for the elaborate rules of origin that determined what goods would count as “North American”? How was it that Mexico was able to reduce protection in such politically powerful sectors as finance, telecommunications, and agriculture?

The negotiations concluded in the middle of the U.S. presidential election campaign and immediately became an election issue. Independent candidate Ross Perot began warning that NAFTA would create a “sucking sound” of U.S. jobs going to Mexico. President Bush, of course, was squarely for the agreement. The question was, where would Bill Clinton position himself on the issue? Clinton delayed a decision as long as possible, sought advice from all quarters, and then took a middle ground. He would support NAFTA but would insist that the labor and environment issues be addressed with supplemental agreements before he would submit the package to Congress for a vote. That a trade agreement became a central issue in a U.S. presidential campaign was surprising. Candidate Clinton's particular position seemed a curious formulation.

Whatever his motivations, Clinton's campaign stance established the agenda in 1993 for the new administration. Before the president would send a bill to Congress for ratification, the United States would seek to negotiate these supplemental agreements. Mexico and Canada reluctantly agreed and hoped that the talks could be concluded swiftly. But the talks dragged on, through the spring and summer, until they finally closed in the early morning of Friday, August 13. By then, Canada was in the midst of its national election; Mexico was beginning the party battle to decide the successor to Salinas; and the window was rapidly closing for Congress to consider the agreement before it went into effect January 1, 1994. As with the commercial negotiations themselves, there are questions about both process and substance: Why did agreement take so long, and why did it take this form?

In August, when the supplemental agreements were reached, President Clinton could finally come to Congress with an implementing bill. But by then public opposition had swollen so much that it appeared impossible for the president to secure the votes needed to pass the agreement in Congress. An extraordinarily broad and motivated alliance of labor unions, environmental groups, citizen and human rights groups, along with Ross Perot, Jesse Jackson, and Pat Buchanan, appeared to be too popular, vocal, and powerful for supporters of NAFTA to overcome. Public opinion polls and focus groups were not encouraging to NAFTA's supporters. At town meetings around the country, members of Congress back home for the August recess got an earful from irate constituents. NAFTA had become a major national issue, vying with health care reform for top billing. In the House of Representatives, where NAFTA's prospects looked dimmest, Majority Leader Richard Gephardt announced his opposition and Democratic Whip David Bonior claimed that he had the votes to kill the agreement.

Herein lies perhaps the biggest puzzle of all. The vast majority of the credible economic analyses showed net gains for all three countries, with very little dislocation for workers in the United States or Canada. This conclusion should not be surprising, since most of the changes required by NAFTA were in Mexico, where numerous sectors enjoyed trade protection, rather than in the considerably more open United States or Canada. For only a few sectors of the economy—generally low wage, currently protected sectors such as apparel and glass—could one confidently project losses for U.S. industries or workers. Even those studies that disagreed about the direction of the economic effects of NAFTA agreed on one point: Those effects would be small. How, then, could a matter with relatively small and probably positive effects on the U.S. economy (or for that matter on the environment, immigration, workers rights, or any of the other issues raised in the context of NAFTA) have become such an enormous political issue? What accounts for the alliance between such normally bitter rivals as Ralph Nader, Ross Perot, and Pat Buchanan? What accounts for the vituperative rhetoric that characterized the opposition: “sucking sound,” “environmental disaster,” and “economic Munich”?

By September 1993, NAFTA was in political trouble. Speaker of the House Tom Foley and the White House agreed that the House of Representatives, where the agreement was in the greatest trouble, would vote on November 17. Faced with the strong possibility of defeat, NAFTA's advocates mounted a furious counterattack. On September 14, former Presidents George Bush, Jimmy Carter, and Gerald Ford joined President Clinton in the East Room of the White House to kick off the campaign for NAFTA. What followed was an all-out campaign on many fronts. The president, his cabinet, and an army of other administration officials; the former presidents and a host of other prominent Americans; CEOs and lesser officials of American business; and important elements of the environmental and Hispanic American community joined in lobbying Congress. In the media, NAFTA supporters filled the newspaper op ed pages with testimonials; cabinet officers, members of Congress, and even the president appeared on television talk shows; the business lobby commissioned and ran election-style television commercials; and, most remarkably, Vice President Al Gore engaged Ross Perot in a debate on a popular cable television talk show, CNN's “Larry King Live.” A less visible business-funded effort modeled after the grassroots organizing tactics of the opposition began to generate phone calls and letters from constituents in key Congressional districts. As the date neared, and NAFTA still lacked votes, the administration scrambled together a package that would win more support: A new development bank to clean up the environment along the U.S.-Mexican border won a couple votes; adjustments in the terms of the sugar, citrus, and vegetable agreements won some more. On November 17, NAFTA passed in the House by a margin of 234 to 200. Three days later it easily passed in the Senate, 61 to 38. But why did victory require such an enormous effort? What understandings of the political problem informed the strategies for and against NAFTA? And what strategies made the difference?

The Nature of Political Analysis

This book has two goals. The first is to answer the questions raised by the history: to interpret NAFTA. The second is to argue for and to develop a general analytic framework for political analysis. The two goals are mutually reinforcing.

To some extent the questions raised by the overview history will be answered by the fuller account provided in subsequent chapters. But narrative, no matter how complete, cannot be completely self-explanatory. We need theory to guide our inquiry. Empirical questions cannot profitably be addressed, indeed cannot even be asked, without some structuring assumptions that direct our attention to what is important, connect causes and effects, and enable us to discern patterns in the otherwise inchoate mass of data. Understanding political processes requires both a rich knowledge of the history and an analytic framework to interpret it.

The impulse of most contemporary political science is to demonstrate the truth or falsity of general propositions—the more general the better. The preferred form of empirical research, therefore, is to articulate a highly parsimonious theory and to test it as rigorously as possible, preferably using econometric techniques.

This book, however, is concerned with political analysis: the science and art of analyzing particular political circumstances. Political analysis does not seek to demonstrate general truths about the nature of politics. It seeks to explicate particular political contexts and processes in such a way that not only explains after the event but also might be useful to actors in the event. The ultimate purpose of political analysis is to inform strategy.

The analytic framework used in this book has two dimensions. One dimension is the level of the analysis, or more particularly of the core units or actors in the international system. Can international relations be understood as a purely international process in which the core actors are nations and/or international institutions or must one attend to domestic processes within nations at either a group or an individual level? The second dimension is the mode of politics. Can political processes, at whatever level of analysis, be understood best as rational choices, institutional processes, or responses to symbolic constructions? The different levels and modes are not mutually exclusive possibilities; indeed they are both logically complementary and practically synergistic. Taken together, they constitute an integrated framework for political analysis.

The framework is considerably more complex than is the norm in political science. This complexity reflects the task facing political analysis. First, because political analysis is concerned with the particular event, it must necessarily be much more attentive to context. The issue for political analysis is not which strategy on average is most likely to work (although that information is useful), it is what strategy is most likely to work in a particular context.

Second, because political analysis is intended to be used, it must be sufficiently rich to include those dimensions of strategy available to the actor; it must have “policy handles.” If one is negotiating an international agreement (or analyzing the negotiation after the fact), one needs a framework in which the choices of negotiators matter. If one is trying to build a winning coalition in Congress (or to analyze after the fact how one was built), one needs a theory that predicts swing votes and identifies ways to bring pressure on those legislators. To be useful, analysis needs to do more than predict general trends, it needs to identify specific points of leverage.

Third, because the impulse of political analysis is not to prove or disprove highly general theory, it does not need to engage in battles over what theoretical approach is generally correct. The issue is not whether the rational choice, institutional process, or symbolic constructivist approach is correct (and which are, therefore, incorrect), or whether domestic politics does or does not matter, but rather which lenses are most useful for interpreting a particular phenomenon. Of course, it is not enough to say that events are complicated and that there are many potentially valid ways of interpreting them. The question is which approach to take when. This can be partially predicted on the basis of observable characteristics. Some processes are more amenable to rational choice models than others. Some processes are more amenable to international level theory than others. But to an equally large extent, the political analyst must be something of a scientific naturalist, equipped with a variety of analytic tools and alert to what is happening. It may not be possible to predict when symbolic politics will play a significant role, for example, or what form those politics will take, but an analyst aware of the potential for such processes and of the forms they may take can recognize and analyze them when they happen.

Organization of the Book

The book is organized in three sections, reflecting three stages of the history of NAFTA. The first section concerns the decision to negotiate, the second the negotiation of the commercial treaty and the supplemental agreements, and the third the politics of ratification in the United States. Individual chapters consist of two parts: a historical narrative followed by an analytic commentary on that history. The narratives are intended to provide as full an account of events as space allows. The commentaries are intended to make an argument about what techniques should be applied to particular questions and particular stages of the history and to demonstrate how such application illuminates the history. The analytic framework and the basic argument are developed in chapter 2.

Deciding to Negotiate

Chapter 3 chronicles the decision by Salinas, Bush, and Mulroney to negotiate NAFTA, addressing the question of why each country chose to act as it did. The analytic commentary at the end of the chapter explores the uses and limits of international relations theory to understand their decisions. The chapter considers, in turn, three systemic theories of international relations—realism, institutionalism, and constructivism—theories respectively based on interests, institutions, and ideas. The chapter argues that each illuminates some aspect of the decision, but that systemic theory is ultimately insufficient. To understand the motivation and timing of the decision, one must attend to domestic politics.

Chapter 4 focuses on the skirmish in the United States to obtain fast-track negotiating authority to proceed. The history underscores the necessity of considering the effects of domestic policy-making processes on international relations. Although President Bush announced his intention to negotiate in 1990, the United States did not actually choose to enter into negotiations until Congress acted in 1991. The chapter argues that the timing is inexplicable without an understanding of domestic institutions. The rules governing the granting of fast track negotiation authority, and the implications of that authority, together created an opportunity and a motive for political opposition. The ensuing fight nearly derailed the negotiations, delayed their beginning, and altered their character. Thus the first section of the book concludes that the decision to negotiate NAFTA must be understood as both a domestic and an international phenomenon, a decision made by three national systems interacting in a larger international system.

International Negotiation

Chapter 5 describes the negotiation of the commercial agreement and argues that to make sense of the process and outcome of international negotiation requires close attention to the configurations of interests and institutions in the domestic arenas of all three countries. The analytic commentary at the end of the chapter uses simple spatial models to demonstrate the value of a two-level games framework, in which the bargaining space available to international negotiators is constrained by domestic factional interests. The analysis suggests that the central negotiating challenge was to coordinate domestic and international bargaining in such a way as to make possible international agreement.

Chapter 6 describes the negotiation of the supplemental agreements on labor and environment. This chapter argues that to explain the outcome requires attention not only to the interaction of domestic interest groups but also to the dynamics within interest groups. It extends the two-level bargaining model to a multilevel model that includes intra-organizational bargaining among individual-level actors. The chapter also points to the necessity of considering the larger context in which these negotiations took place, in particular the looming shadow of the ratification fight in the United States. The chapter, however, concludes that a purely interest-based model is ultimately insufficient to explain the motivation of individuals in these groups and the nature of the gathering storm over ratification, and suggests the necessity for considering the role of symbolic politics.

The Politics of Ratification

Chapter 7 describes the politics of advocacy in the United States, with particular attention to the motivation and tactics of NAFTA's opponents. The chapter argues that the disagreement between the magnitude and pattern of U.S. domestic opposition and the economic and other interests at stake challenges rational choice theories of political behavior. To make sense of the character of domestic opposition to NAFTA requires interpretation through a symbolic constructivist lens. Many opponents (and many supporters) based their position not on what NAFTA logically would do to their interests but on what NAFTA symbolized to them. The chapter does not argue that this was “irrational,” however. First, given their values and understandings of NAFTA's meaning, individuals adopted reasonable stances. Second, given the costs associated with acquiring and processing information about NAFTA, and the likely low payoff from such an investment, individuals quite rationally chose to rely on relatively simple symbols and stories to form their judgments. Third, supplying such symbolism was quite rational for policy entrepreneurs who had interests in NAFTA or in using NAFTA to further other interests. Taken together, supply and demand create a market for meaning. But rational choice cannot explain the form of the exchange—which symbols were demanded and which were supplied.

Chapter 8 describes the campaign to pass NAFTA in Congress and the eventual success of the campaign. The analysis considers the problem of political diagnosis faced by NAFTA's advocates in the fall of 1993. The problem was partly institutional. The rules of fast track, the organization of Congress, and bureaucratic inertia in the administration all presented significant obstacles to assembling an implementing bill and bringing it to a vote. The problem was partly about interests. The configuration of interests mobilized against NAFTA and the ability of those groups to affect the votes of members of Congress threatened NAFTA's prospects if it came to a vote. And the problem was partly about the social construction of NAFTA. NAFTA's symbolic meaning to the general public, to members of interest groups, and even to members of Congress created political pressures and perceptions of those pressures that threatened to overwhelm NAFTA.

To pass NAFTA, all three problems needed to be solved. The chapter argues that strategists in the Clinton administration, Congress, and the business community pulled together a coherent and effective strategy that involved management of institutions, bargaining with interests to build a supporting coalition, and symbolic communication to reconstruct the meaning of NAFTA for the interested public, key opinion leaders, and members of Congress.

The concluding chapter pulls together the analytic and historical threads of the book. It argues that a practical theory of politics must cross boundaries. Political processes may involve the competition of interests, the operation of institutions, and the creation of symbolic constructs. Such processes may operate among nations at the international level, among groups in domestic political arenas, and among individuals situated at various locations in the political landscape. Theories that deal with only one cell of the matrix, while useful, are necessarily incomplete. Attempts to drive out competitors are misguided. The goal should not be parsimony for parsimony's sake. The question is not which one theory is correct, but which approach (or approaches) is most appropriate for the problem at hand. The compleat political analyst needs a full toolbox and the ability to judge which tool the task requires.

Interpreting NAFTA : The Science and Art of Political Analysis