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

 

3. Why a North American Free Trade Agreement?

In 1990, Mexico, the United States, and Canada decided to negotiate a North American Free Trade Agreement. A year earlier, even the most enthusiastic advocates of such negotiations thought they were a decade away. Mexico, almost everyone agreed, was not yet ready for such a bold move. The United States was preoccupied with efforts to complete the huge multilateral Uruguay Round of the General Agreement on Tariffs and Trade (GATT) negotiations. Canada was still digesting a free trade agreement with the United States completed two years earlier, an agreement so politically unpopular that the idea of entering into new free trade negotiations was practically unthinkable.

Yet in early February 1990, a year and a half after he took office, Mexican President Carlos Salinas de Gortari decided to ask the United States to negotiate a free trade agreement with Mexico. Within a month, United States President George Bush had agreed to pursue the possibility. In June, Bush and Salinas publicly announced plans to investigate the possibility of negotiating a bilateral agreement.

Canadian Prime Minister Brian Mulroney initially chose to keep Canada on the sidelines. Over the summer, however, Canada decided that it would like a seat at the negotiating table. At the end of August, just as the Bush administration was planning to ask Congress for authority to negotiate with Mexico, Canada asked to join the talks. Mexico and the United States hesitated, fearing that the Canadians would merely complicate negotiations, and not until January did the three countries finally agree to make the talks trilateral and to negotiate a North American free trade area.

Why did Mexico turn north, seeking formal links to a neighbor it had so long kept at a distance? Why did the United States agree to negotiate a free trade agreement with a country it had so long ignored? And why did Canada first decide to stay out and then change its mind?

 

Mexico Looks North

To appreciate the boldness of the Mexican decision, we need to place it in the context of the troubled history of relations with the United States. Heroic opposition to American aggression is a central theme of Mexican history. At the foot of Chapultapec Castle in the heart of Mexico City is the monument to the “Child Heroes,” Mexican cadets who in 1847 jumped to their deaths rather than surrender to the approaching American troops of General Winfield Scott. Since the United States took a third of Mexico by force in the Mexican-American war, Mexicans have had many good reasons to regret their proximity to the United States. Every Mexican knows the aphorism: “Poor Mexico. So far from God, so close to the United States.” Fear of U.S. intervention has continued to be a central theme of modern Mexican politics. As the Mexican writer Jorge Castenada has noted, “In nearly all domestic conflicts in modern Mexico, the winning side—since the Revolution, the government side—has raised the specter of national disintegration due to foreign intervention.” ₁

A history of distrust created a habit of distance from the United States. Throughout the Cold War, Mexico was a consistent critic of U.S. policy in Vietnam, in Cuba, and in Nicaragua. In economic matters, Mexico had pursued an independent path as well, tightly restricting foreign investment and limiting foreign trade. In keeping with the spirit of the Mexican revolution of 1910, Mexico organized its agricultural sector in a system of farm communes known as ejidos, maintained a state-owned oil monopoly created when it nationalized foreign-owned oil companies in 1938, and maintained high levels of state ownership and control elsewhere in the economy. The move toward a free trade agreement with the United States represented a sharp break with this past.

The Mexican Debt Crisis

During the administrations of Luis Echeverría (1970-1976) and José López Portillo (1976-1982) Mexico pursued an “import substitution” approach to economic development. ₂ The idea, popular at the time throughout the developing world, was to nurture domestic manufacturing through subsidies and protection, on the theory that economies with larger manufacturing sectors grow more rapidly. In addition, in part as a legacy of the revolutionary tradition in Mexico, the Mexican government greatly expanded its role in the Mexican economy through state ownership and extensive regulation.

Mexican trade protection in this period involved both high tariff and nontariff barriers. The maximum tariff was 100 percent, with an average tariff rate near 20 percent. More formidable, however, were license requirements for imports. In 1960, 38 percent of imports were subject to import permits. By 1982, every import into Mexico required a permit, applications for which could be denied if domestic substitutes were available or for whatever reasons Mexican officials did not deem the import acceptable. ₃ Moreover, Mexico declined to join the GATT, the basic international agreement adhered to by most of the world's trading community.

State ownership of “strategic industries” increased dramatically during the 1970s. From 1970 to 1982, the number of parastatals (state-owned enterprises) increased from 391 to 1155, and their share of the national gross domestic product (GDP) rose to 18 percent. ₄ Petroles Mexicanos (Pemex), the state-owned oil company, continued to enjoy its monopoly status in that most important industry. Extensive government regulation governed the remaining private sector.

For most of the 1970s the strategy appeared to be highly successful. The Mexican economy grew at an average of over 7 percent for the decade, led by strong industrial expansion. ₅ When large oil deposits were discovered in the mid 1970s, there appeared to be no reason why the boom wouldn't last indefinitely. But the oil discovery masked deep structural problems that would make expansion unsustainable and create economic disaster in 1982.

High oil prices created a glut of dollars on the world market in the mid 1970s. Banks found themselves with cash and looked for people to lend it to. Mexico was only too happy to borrow, using the funds to prop up its increasingly uncompetitive state enterprises and to fund a huge fiscal deficit. Expansionary monetary policy and an artificially high peso also helped sustain the binge. By 1982, Mexico's total external debt was $92 billion. ₆

Then the wheels came off. A world-wide recession made it harder for Mexico to sell goods abroad to obtain the foreign currency it needed to repay its debts. Tight monetary policy in the United States and elsewhere in the developed world raised real interest rates and made it more difficult to pay old debts with new loans. Furthermore, the peso devalued relative to the dollar, making it more expensive to pay back the largely dollar-denominated debt. By the summer of 1982, commercial banks had stopped lending to Mexico. In August, Mexico effectively declared bankruptcy, becoming the first developing country to suspend payments on international debts.

In the throes of this economic crisis, President López Portillo responded with the populist gesture of blaming the financial community and nationalized the banks as one of his last acts in office. The powerful Mexican financial community, long an ally of the ruling Partido Revolucionario Institucional (PRI) party, was outraged. ₇ The move was popular with the public but soon proved economically disastrous. Capital fled Mexico, unemployment soared, and real wages plummeted.

The de la Madrid Administration

Since the Mexican Revolution, the PRI had ruled Mexico without serious challenge. As Mexico's constitution allowed the president only a single six-year term, the question of succession hinged on the selection of the next PRI candidate by his predecessor. López Portillo's hand-picked successor was his planning minister, Miguel de la Madrid, who inherited the mess when he took office at the end of 1982.

Despite his ties to López Portillo, de la Madrid presented a sharp contrast to his populist predecessor. With a graduate degree in public administration from Harvard, de la Madrid was more of a technocrat who believed in market economics and free trade. With the strong encouragement of the international finance community, de la Madrid first moved to stabilize the domestic economy. In his inaugural address in December, the new president condemned the “economic populism” of his predecessor and announced a program of economic austerity. He raised taxes, cut the budget, lifted price controls on most items, and negotiated the terms of Mexico's debt with its creditors and the International Monetary Fund. The policies sparked sharp criticism from the Mexican left. The Socialist Workers Party, for example, said that “severe austerity, hunger, unemployment and misery, along with repression of the masses and cuts in democratic and labor liberties will be certain under the government of Miguel de la Madrid.” ₈

De la Madrid, a cautious politician by nature, was careful not to move too quickly. He moved most cautiously on the trade front, but in 1985 he began to reverse Mexico's protectionist policies. In July, de la Madrid cut the percentage of imports requiring import licenses to 65 percent, down from 100 percent at the beginning of his term. Then, at the end of the year, he took the dramatic step of applying to join the GATT. Mexico had come close to applying before, in 1979, but populist opposition by a coalition of intellectuals, small business owners, and labor union leaders had persuaded López Portillo to back away. This time, de la Madrid carefully cultivated support in the private sector first, orchestrated a Mexican Senate panel recommendation in favor of joining GATT, and then appeared to respond to the Senate demands. There was no backlash. ₉ Over the next year, Mexico negotiated the terms of accession to GATT, agreeing to cut its maximum tariff to 50 percent and to work to lower it further.

In 1987, de la Madrid faced another economic crisis. The stock market crashed; the peso fell precipitously; and inflation spiked up again. De la Madrid's response, unlike that of his predecessor, was to accelerate economic reform. At the end of 1987, de la Madrid issued decrees that lowered Mexico's maximum tariff to 20 percent (which lowered the weighted average tariff to 11 percent) and eliminated import license requirements for all but a quarter of imports. ₁₀ The decrees had been carefully worked out with key factions of the business community—including especially Augustín Legoretta, former president of the National Bank of Mexico and president of the Coordinating Council of Entrepreneurs (CCE), and Vincente Bortoni, president of the National Confederation of Industrial Chambers (CONCAMIN), a coalition dominated by large manufacturing interests—and with the largest labor unions as part of an overall pact to restrain prices and wages. ₁₁

As the Mexican economy began to open in the 1980s, international trade became more important to Mexico. Mexican exports nearly doubled in real terms from 1980 to 1989, going from $15.2 billion in 1980 to $29.6 billion in 1989 (in constant 1987 dollars). As a percentage of GDP, exports rose from 12 percent, where they had been for decades, to 20 percent. In the same period imports soared from $19.3 billion to $31.1 billion, although they dipped precipitously during the economic crises of the mid 1980s. ₁₂ All of this meant that by the end of the decade, much more of the Mexican economy was tied to international commerce than at the beginning.

Most of these ties were to the United States. Two-way trade between Mexico and the United States soared from $18.4 billion in 1979 to $51.5 billion in 1989 (measured in current dollars). For Mexico, this represented more than two-thirds of both imports and exports. Mexico became the United States' third-largest trading partner after Canada and Japan. Foreign direct investment in Mexico, which had fallen to less than $1 billion a year in 1982 and 1983, rose to an average of $3 billion a year in the last three years of the decade. The accumulated value of that investment rose fourfold during the decade to $26.6 billion, two-thirds of which was from the United States. ₁₃ The growth in trade and investment represented a kind of “silent integration,” which in both countries created interests that had a stake in freer trade.

Some portion of the overall increase in commerce came from rapid growth in the maquiladora program, which allowed foreign businesses to locate in areas of northern Mexico near the U.S. border, import components duty-free from outside, assemble them, and export the finished product without duties. The program began in 1965 as part of Mexico's strategy to improve the economy of its border region and support the United States' efforts to reduce incentives for illegal immigration. During the 1960s and 1970s, the program grew very slowly. In 1980, 620 plants employed 119,546 workers, mostly women, and mostly in textiles and light manufacturing. But in the 1980s, the program took off, driven in part by a fall in the value of the peso. By August 1989, 1699 plants employed 443,682 workers and the numbers were growing rapidly. The biggest growth came in electronics and transport equipment, which by the end of the decade accounted for 38 percent and 20 percent of the total, respectively. ₁₄ Unlike the early sweatshops, many of the new plants were efficient modern facilities with high levels of productivity.

Despite the growing importance of the United States in the Mexican economy, de la Madrid was cautious about establishing formal economic ties with the United States. Mexican politicians have always been leery of appearing to be too close to the United States, and differences over policy in Central America kept relations cool between the governments for most of the decade. But quietly, the United States and Mexico were laying the groundwork for more extensive trade and investment cooperation. In 1985, they signed an agreement governing subsidies and countervailing duties. In November 1987, the two countries agreed to a “Framework of Principles and Procedures,” in which they agreed to consult with each other whenever disputes arose. The understanding was a breakthrough of sorts. Sectoral accords on steel, alcoholic beverages, and textiles followed. But the agreement was very modest compared with the free trade agreement the United States was then negotiating with Canada.

Mexico sat on the sidelines while Canada and the United States negotiated a free trade agreement in 1986 and 1987. A similar agreement with the United States seemed only a remote possibility, although the idea received support in some quarters. In his announcement of candidacy for president in 1979, Ronald Reagan had proposed a “North American Accord” among Mexico, Canada, and the United States. “The key to our future security may lie in both Mexico and Canada becoming much stronger countries than they are today,” he said. At the time, the idea was received very coolly in Mexico, although López Portillo was pleased by the respect Reagan showed for Mexico when Reagan visited to push the idea. Others in the United States continued to promote the concept periodically. The economist Sidney Weintraub, a noted expert on Mexico, published Free Trade Between Mexico and the United States? in 1984, calling for just that. ₁₅ But de la Madrid had no intention of moving faster than the political climate would allow. During his administration “there was no idea of a free trade agreement,” he later asserted. ₁₆

Salinas Takes Over

Senator Bill Bradley (Democrat, N.J.) had been taking an interest in Mexico since his chairmanship of the Debt Subcommittee of the Senate Finance Committee thrust him into a prominent role in the effort to restructure the Mexican debt. He started making annual private trips to Mexico in 1985 to learn more about the country and to get to know its leaders. Bradley became the foremost advocate in the U.S. Senate for forgiving some of the debt if Mexico pursued economic reform. “Clearly they needed an open trading system and the Mexican economy needed to be modernized,” he recalled. Bradley became an advocate of a free trade agreement between Mexico and the United States, not only for its economic merits, but also as a way to begin to bridge the “cultural divide” between the two countries.

In 1987, on one of his visits to Mexico, Bradley met with de la Madrid's young planning minister, Carlos Salinas de Gortari. Bradley found Salinas very impressive. Salinas, a Ph.D. political economist from Harvard, was the “most economically oriented” of the Mexican cabinet officers, “a very precise thinker,” recalled Bradley. The two men shared similar views about Mexican economic reform. But when Bradley urged Salinas to consider a free trade agreement with the United States, “Salinas said ‘No, no.’ I don't think he thought Mexico was ready for it,” recalled Bradley.

Shortly afterward, de la Madrid tapped Salinas to be the PRI candidate and his presumed successor. For the first time, however, a PRI candidate faced a significant electoral challenge, this time from Cuahtémoc Cárdenas, the son of a former president and the leader of a liberal coalition promising political reform. Salinas won a narrow victory in an election marred by allegations of vote fraud and a widespread belief that Cárdenas had actually won a plurality of the vote. From this shaky beginning, Salinas quickly proved to be an effective politician in office, launching an aggressive anticorruption campaign and a highly publicized rural development program known as “Solidarity.” ₁₇

Salinas brought into office cabinet ministers much like himself, most importantly Jaime Serra Puche as Minister of Commerce and Trade and Pedro Aspe as Finance Minister. Both Serra and Aspe were Ph.D. economists, trained in the United States. Like Salinas, they believed in market economics and in free trade and understood the importance of international financial markets in determining the flow of capital around the world. In their view, to grow economically, Mexico needed to attract foreign capital. And the way to make Mexico attractive to foreign capital was to complete the transformation of the Mexican economy.

Where de la Madrid had been cautious, Salinas was bold. In the first year he announced further unilateral tariff reductions, the elimination of most remaining import licensing requirements, and privatization of the vast majority of Mexico's state-owned enterprises, most importantly the banks that had been nationalized by López Portillo. Salinas also moved to secure closer economic relations with the United States. In this, he was helped by the election of George Bush in 1988. As a Texan, Bush was familiar with Mexico. Before he took office, he invited Salinas to his home in Houston. The two men quickly developed a personal friendship. Bush directed Treasury Secretary Nick Brady to work with Pedro Aspe on a debt relief package that would finally put the debt problem to rest. The Brady plan, as it became known, committed the United States to a position in favor of significant debt relief.

The two countries also began a more intensive dialogue on trade matters. In October 1989, the United States and Mexico reached an “Understanding Regarding Trade and Investment Facilitation Talks,” which went somewhat beyond the framework agreement of two year earlier. The convention affirmed their intention to enter a series of proactive negotiations, not just consultations as needed when problems arose, to deal with such cross-sectional issues as intellectual property, services, and investment, although little real progress was made.

In December, while in the United States to sign the accord, President Salinas met with leaders of the U.S. business community. He found great enthusiasm for further trade and investment liberalization. At his urging, Jim Robinson, Chief Executive Officer (CEO) of American Express, and Colby Chandler, CEO of Eastman Kodak, both of whose companies had experience operating in Mexico, formed a task force of the Business Roundtable, an elite business organization composed of the CEOs of the largest U.S. corporations, to consider ways to strengthen U.S.-Mexican trade relations and to make recommendations to both governments.

Still, the vision on both sides of the border was of incremental progress. The thinking in both capitals was that such a dramatic move as a free trade agreement was many years off. In Mexico City, the idea just seemed too politically risky, particularly given that it had originally come from the highly unpopular Ronald Reagan. “Every time the idea came up, we kept on leaving it behind us,” recalled Jaime Serra. “Our analysis was clouded by the political and ideological background of the proposal.”

In Washington, free trade negotiations with Mexico seemed premature to most pundits. Better to let the fallout from the Canada agreement settle and to finish the multilateral Uruguay Round of the GATT before starting something new. The American academic Sidney Weintraub, a leading proponent of free trade with Mexico, voiced the prevailing view: “In the next 10 years we may see a free-trade agreement with Mexico, but it won't come before then. We'll see a series of agreements on textile quotas, steel, intellectual property and so on. We'll see a series of negotiations that will conclude in a free-trade agreement.” ₁₈ Mike Aho, director of international economic studies at the Council on Foreign Relations, and former aide to Senator Bill Bradley, stated that “I don't see any comprehensive agreement between Mexico and the United States before the next century.” ₁₉ Aho, however, hedged his bets. A free trade agreement might come earlier, he predicted, if the Uruguay Round stalled.

The Decision in Davos

At the beginning of February every year, heads of state, finance ministers, politicians, and corporate leaders gather in Davos, Switzerland, for a week of informal discussions at the World Economic Forum. In 1990, Carlos Salinas was to address the opening session. For Salinas, the trip to Europe was a great opportunity to promote what his administration was doing in Mexico and to interest international investors. He had just finished another renegotiation of the Mexican debt, an agreement that would be announced in Davos, but Salinas knew that for his reform program to work he needed an infusion of foreign capital. “We were still facing some confidence problems,” recalled Jaime Serra, who accompanied Salinas to Davos. Here was a chance to sell the Europeans on what Salinas was doing in Mexico.

But what Salinas discovered in Davos was that Europe was more interested in looking inward than outward at Mexico. The deadline of 1992 for completing negotiations for a European Union loomed. And the talk in Davos was about the fall of the Berlin Wall and the stunning changes in Eastern Europe. Salinas urged the Europeans not to lose sight of the rest of the world. “May these splendid signs of change not cloud Europe's global vision, nor turn its attention away from our continent—particularly Mexico—and from other regions of the world,” he implored the gathering in his keynote address. But Salinas quickly concluded that the Europeans were doing exactly what he urged them not to do. “We realized that the world was moving very quickly,” recalled Jaime Serra. Mexico would need to do something dramatic if it wanted attention.

Salinas and his cabinet officers talked late into the night, for the first time discussing seriously the option of a comprehensive free trade agreement with the United States. From an economic point of view, a comprehensive agreement made a great deal of sense. First, it was consistent with the whole economic reform program under way. “We wanted our economy to be competitive,” said Serra. Opening markets piecemeal would create distortions. “You can't open up in cookies if you don't have competitive wheat,” he explained. To be competitive, Mexican industry needed competitive inputs, including better services and cheaper capital. Second, by combining negotiations, Mexico would be in a better position to obtain concessions in areas in which it had comparative advantages, for example in agriculture. If issues were handled separately, the U.S. would only negotiate seriously in sectors such as financial services in which it wanted something. Third, and most significant in the context of their experience in Davos, a free trade agreement with the United States would be the kind of bold move that would attract attention in the international financial markets and bolster confidence in the direction that Mexico was heading. Still, the politics made Salinas and his advisors nervous. The meeting broke up without a decision.

Late that night, Carlos Salinas decided: Mexico should seek a free trade agreement with the United States. Jaime Serra met with United States Trade Representative (USTR) Carla Hills the next day. At their meeting, Serra suggested to Hills that their deputies handle the minor issue about which they were meeting. Serra told Hills his government would like a free trade agreement with the United States. Hills told Serra she would have to consult with her president.

 

The United States Responds

The Mexican proposal came as a surprise to United States Trade Representative Carla Hills and her staff. Their initial reaction was not enthusiastic. For the USTR, the top priority was finishing the multilateral Uruguay Round of the GATT, which was taking much longer than initially expected. The thinking was that there were not enough resources to negotiate both the Round and a bilateral agreement with Mexico. Jules Katz, the deputy USTR and chief negotiator for the GATT negotiations, recalled his reaction:

I had some concerns. First, 1990 was the year we were going to finish the Uruguay round, and free trade negotiations with Mexico might be distracting. Second, I had concerns about how far the Mexicans would go. They had always insisted on special and differential treatment. Third, there might be undesirable diversionary effects on the Caribbean and Central America.

In Mexico, Salinas and Serra worried that things would move slowly if they relied only on Hills and the USTR, so they decided to open some other channels of communication. Serra and Jose “Pepe” Cordoba, Salinas's Chief of Staff, flew to Washington to meet with Secretary of State James Baker, Secretary of Commerce Robert Mosbacher, and Secretary of the Treasury Nicholas Brady, as well as USTR Hills.

Mosbacher, like Bush a Texan, supported the idea. Indeed, he had been pushing it himself for some time. This was important, since it meant that the usually protectionist Commerce Department would not stand in the way. Brady was less receptive at first. He told Serra that he would prefer to separate negotiations on financial services from other issues. I'm not trading banks for avocados, he told Serra. Serra responded that if avocados weren't on the table, he wasn't trading banks. Serra persuaded him that the talks needed to be comprehensive.

The Mexican delegation knew that the key was Baker, clearly the most influential cabinet officer in the Bush administration. Without Baker's support, Mexico would not pursue the agreement. In Baker, however, Serra and Cordoba found a strong ally. Baker, another Texan, viewed stronger ties with Mexico as a cornerstone of the U.S. foreign policy. In his confirmation hearings before the Senate Foreign Relations Committee in 1989, Baker had told the committee: “It is time that we regarded Mexico with the respect and the seriousness it warrants. Whatever the past, we must all be aware that America's relationship with Mexico means a very great deal. I happen to believe, Mr. Chairman, that it is as important as our relationship with any other country in the world.”

Baker responded to the Mexican initiative with enthusiasm. As Robert Zoellick, then counselor to the Secretary and Baker's closest aide for international economic issues, recalls, he “saw the free trade agreement with Mexico as part of an overall strategy of building our continental base.” Baker advised President Bush to accept the Mexican proposal.

On a Sunday evening in late February, Carlos Salinas called George Bush. Would the United States be willing to enter into free trade negotiations with Mexico? he asked. The answer was “yes.” Bush would direct his administration to work on the details. The two leaders agreed to quietly build support during the spring and to use the occasion of Salinas's visit to Washington in June to announce the agreement.

At the USTR, Carla Hills asked her staff for an assessment of the policy and political implications of a free trade agreement. They concluded that an agreement was both more technically and more politically feasible than many at the USTR had originally thought. Chip Roh, Assistant USTR for North America, led the effort. He recalls that “[t]he analysis made the USTR more optimistic. Traditional [trade] malcontents such as steel, etc. wouldn't be opposed. There was a lot of interest in the investment community. Mexico was reforming and its economy was getting better. In short, it seemed doable.”

Administration officials began conferring with key political players around Washington. The support of House Ways and Means Committee Chairman Dan Rostenkowski and Senate Finance Committee Chairman Lloyd Bentsen were essential. Any agreement would eventually have to pass through their committees. As Jules Katz recalls, “Bentsen and Rosty were not overwhelmingly supportive. They were concerned that we were loading one more thing onto the political process. But they didn't put up a red light.”

In March, a delegation of prominent American CEOs led by Kodak's Chandler and American Express's Robinson traveled to Mexico to consult with Mexican officials and business leaders. The group had come together in the fall, at the suggestion of Carlos Salinas, who thought they could be helpful in furthering the bilateral trade relationship. Their purpose now was to encourage Mexico to move more quickly to reduce trade barriers. As they made the rounds, they discovered that Serra was now thinking more boldly than they were and was now talking about comprehensive free trade negotiations. Robinson and Chandler agreed to help organize U.S. business support for the idea by the time of the announcement in June.

In late March, Canadian Prime Minister Brian Mulroney arrived in Mexico for a state visit. The agenda included signing a Memorandum of Understanding committing Canada and Mexico to continuing discussions on trade matters, but little else. In Mexico, Mulroney heard that the Mexicans were pursuing a much more extensive bilateral agreement with the United States, along the lines of the Canada-U.S. Free Trade Agreement (CUFTA). His reaction was to wish the Mexicans well, but he made it clear that Canada had no interest in taking part in the talks. As Jaime Serra recalls, Mulroney told the Mexicans they didn't want to change their agreement, that politically it would be very expensive.

 

Announcing the Decision

Mexico and the United States had hoped to build support for free trade negotiations before going public with the plans. This was particularly important for the Mexicans, who feared a nationalist backlash against closer ties with the United States. The politics “had to be handled carefully” recalled a senior Mexican official. “In Mexico, the easiest thing to do is to organize 100,000 people in a demonstration and put them in front of the U.S. embassy. The hardest thing to do is to persuade them to do a free trade agreement with the United States.”

A leaked story in the Wall Street Journal on March 26 scuttled the careful orchestration. The story revealed that there had been secret talks between high level officials of the United States and Mexico and that the two countries had agreed to pursue a free trade agreement. The Mexican embassy issued an ambiguous statement: “It cannot be confirmed that a free trade agreement will be realized between the two countries.” President Salinas was silent. “We are trying to cool things off so that it cannot be exploited by the ultranationalists,” an unidentified senior Mexican official told a Canadian reporter. ₂₀ During a State Department press conference in Washington, Secretary Baker acknowledged that there had been talks with the Mexicans but was at pains to assert that they were “very preliminary,” implying that nothing had been settled yet.

An unrelated incident in April complicated the domestic political problem in Mexico. Bounty hunters paid by the United States Drug Enforcement Administration (DEA) abducted a Mexican doctor, Dr. Humberto Alvarez Machain, and transported him across the border to El Paso, Texas, where he was arrested for complicity in the 1985 torture and murder of Enrique Camerena, a DEA agent. The United States had previously requested that Alvarez be extradited to the United States, but Mexico, which had a tradition of refusing extradition, had not turned him over. At first, the United States denied any involvement in Alvarez's abduction. But on April 27, The Washington Post reported that the abduction had been planned by the agent responsible for the Camerena case. Few stories could have touched a rawer nerve. Mexico was in an uproar over this breach of national sovereignty. The Mexican press gave the case extensive coverage. The Mexican Congress called for a formal investigation. A furious President Salinas threatened to throw all DEA agents out of Mexico and to suspend joint antidrug efforts. Vice President Quayle was dispatched to Mexico to apologize to Salinas. In a private meeting, Salinas tore into the vice president. This was a violation of Mexican law, an assault on Mexican sovereignty, a return to the wild west. At a press conference Quayle later acknowledged (with considerable understatement) that President Salinas had “expressed to me his strong displeasure with the Dr. Alvarez incident.” ₂₁

Despite the incident, Salinas pressed ahead with plans for a free trade agreement. As he had done when orchestrating Mexico's accession to GATT as planning minister under de la Madrid, he convened a Senate “consultation forum” and charged it with making recommendations to him about options for Mexican trade policy. In its report to Salinas delivered on May 21, 1990, the group recommended “the negotiation of a free trade agreement” with the United States but stated that “this agreement would preserve the country's political and economic sovereignty and leave Mexico free to establish its trade policy with the rest of the world.” The next day, Salinas told the senators that he intended to follow their recommendations. He would discuss a free trade agreement with President Bush when he visited Washington in June, but he sought to demonstrate the limits to what he was proposing. Mexico will seek “free trade with the United States but not a common market like the example of today's Europe,” he said. ₂₂

In the United States, consultations with the private sector and with Congress had identified some opposition but also strong support. The labor unions were clearly unhappy, but union opposition to free trade with Canada had been easily overcome. Producers in agricultural sectors likely to face stiffer competition from Mexico expressed alarm, as did a smattering of smaller, mostly labor-intensive industries. But this opposition was more than offset by the very strong support coming from such major business associations as the Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers. There were a few warning signs. When Jaime Serra traveled to Chicago to meet Rostenkowski in his home district, Rostenkowski told him he was supportive but warned that this was not going to be easy. Still, the Bush administration did not anticipate any major problems.

On Sunday, June 10, Presidents Salinas and Bush met at the White House, the fourth meeting of their presidencies. “The two presidents are convinced that free trade between Mexico and the United States can be a powerful engine for economic development, creating new jobs and opening new markets,” they said in a joint statement. The next day, the Business Roundtable endorsed the plan and issued a report from its task force calling for a comprehensive trade and investment pact. President Salinas met with the CEOs of the Roundtable, thanking them for their support. He emphasized the competitive advantages of a free trade agreement. “Europe of 1992 will be the largest market in the world if we don't get an agreement,” he said. ₂₃ Appearing on “NBC News” later that day, Salinas responded to a question about the potential for job loss in the United States. “Where do you want Mexicans working, in Mexico or the United States?” he asked. “Because, if we cannot export more, then Mexicans will seek employment opportunities in the United States. We want to export goods, not people.” ₂₄

Although the June announcement in the United States was carefully orchestrated to get maximum positive coverage, some reactions were negative. Union response was particularly sharp. Speaking for the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) at a hearing in the House of Representatives, Mark Anderson, director of the union's trade task force, said that the union viewed the prospect of a free trade agreement between Mexico and the United States with “considerable alarm.” Anderson asserted that a free trade agreement would encourage greater capital outflows from the United States, lead to an increase in Mexican imports, and further harm the U.S. industrial base. “A free trade agreement with Mexico, a country where wages and social protections are almost nonexistent when compared with our own, simply invites disaster for U.S. workers,” Anderson asserted. Moreover, the vast differences in regulatory structures and social protections “cannot help but create serious difficulties for U.S. production.” ₂₅

For its own membership, the AFL-CIO sounded the alarm in the AFL-CIO News. The weekly newspaper linked the proposed free trade agreement to the existing maquiladora program, about which it had been running articles for some time. A free trade agreement with Mexico would be more of the same. “More American jobs would be jeopardized—on top of the tens of thousands that have already been lost to so-called maquiladoras—without any substantial benefit to the poverty-wage workers of Mexico,” the newsletter said. ₂₆

In Congress, Democratic members with ties to organized labor voiced reservations about moving ahead too quickly with the Mexico negotiations. House Majority Leader Richard Gephardt (Democrat, Mo.) urged the USTR not to rush into an agreement before looking more closely at the effects of the maquiladora program. Representative Don Pease (Democrat, Ohio) warned: “Before we try to enter into an agreement, let us try to figure out what the likely impact would be. There are bound to be some winners and losers.” ₂₇ At a House Ways and Means Committee hearing on June 14, Charles Rangel (Democrat, N.Y.) urged that Mexico improve its drug enforcement before the United States negotiated free trade. “The [cocaine] epidemic is a threat to our national security,” Rangel said. ₂₈ But for now, the voices of concern were largely ignored by the Bush administration.

The Mexicans wanted to move quickly. They “had a great concern about timing,” recalled Jules Katz. “They wanted it complete before the end of Bush's first term and before Mexico entered into their election cycle. They definitely didn't want it to carry over to 1993.” They also felt that the longer the talks took, the more risks they ran in the financial markets. Mexican strategists were always cognizant of investor confidence. “My time constraint,” recalled Jaime Serra, “was mostly driven by market expectations.” Serra and Hills, and their deputies Herminio Blanco and Jules Katz, had laid out a timetable at an all-day meeting in Los Angeles in late July. “We thought we could do this reasonably fast,” recalled Katz. “I said, let's work back from the future. Let's set a date of the end of 1991, which gives us 1992 for the legislative process. We knew we had to get fast track authority. But we thought we could begin the prenegotiation process [in which] we could present ideas and concepts. Then the negotiations could go smoothly.”

In August, President Salinas formally requested a free trade agreement with the United States. In September, President Bush notified Congress of his intention to enter into negotiations with Mexico. Under the terms of U.S. trade law, the Congressional notification began an important clock. Unless either the Senate Finance Committee or the House Ways and Means Committee voted to block the talks within 60 legislative days (days that Congress is in session), the president would be automatically authorized to negotiate with Mexico under fast track rules. ₂₉ The 60-legislative day period was expected to expire sometime early in the spring. With little significant opposition in either committee, there appeared to be no obstacle to proceeding.

In November, President Bush traveled to Mexico for his sixth meeting with President Salinas. A crowd of 75,000 Mexicans gave Bush a hero's welcome. “This relationship is of vital importance to my country,” he told the crowd. “We will never neglect it. We are neighbors and we are friends.” ₃₀ The day before, Bush had lunch with Salinas at Agualeguas, the ancestral home of Salinas, near the Texas border. Bush talked about the luncheon in his speech.

It was in Agualeguas that I saw many similarities of our backgrounds. Both of us are the sons of senators. Both of us were raised to believe in public service and both of us know that what is true for two people is true for two nations. Friendship makes us stronger. I know that my country is also stronger because of Mexico's contribution to our cultural heritage—a rich bequest: architecture, language, and culture. And in a more personal way is the heritage bestowed on the Bush family. Our son Jeb has lived in your country, his wife Colomba was born in your country and their union has given Barbara and me three beloved grandchildren. So when I speak of Americans and Mexicans I can only say somos una familia, we are one family. ₃₁

There was, however, one item of business aside from good will. The two governments issued a joint communiqué announcing that they were now “contemplating the way in which Canada might consider joining such negotiations.” The Canadians had changed their minds; they wanted to be at the table after all.

 

The Canadian Dilemma

In March, when they had first learned that the United States and Mexico intended to negotiate free trade, Canadian Prime Minister Mulroney and Trade Minister John Crosbie had stated that Canada would not take part.

John Weekes, who eventually would be Canada's chief NAFTA negotiator, recalls the first Canadian response. “Our initial reaction was, ‘Oh my God, why would we want to do that?’” The U.S.-Canada free trade negotiation had been a huge issue in Canada in 1988, perhaps the dominant issue of that year's election campaign. The Canadian public had been equally divided on the merits of the agreement at that time, but when the Canadian economy went into recession shortly thereafter, most Canadians seemed to attribute the accompanying high unemployment to the free trade agreement with the United States. In a poll taken for Maclean's magazine in May 1990, when asked whether the free trade agreement had “hurt, made no difference or helped jobs and economic conditions in Canada,” only 7 percent thought it had helped and 57 percent thought it had hurt. ₃₂ Given the state of public opinion, there was little political appetite for entering into negotiations that might provide an opportunity for Canadians to vent their displeasure.

Canadian trade officials, however, found the idea of being left out of the talks equally troubling. If Canada did not join, the United States would be the center of a hub-and-spoke arrangement, which would make locating a business in Canada relatively less attractive than locating it in the United States. Moreover, sitting on the sidelines, Canada would forfeit any leadership role it might hope to play in future trade negotiations. Within the Canadian government, Trade Minister John Crosbie, Finance Minister Michael Wilson, and Canadian Ambassador to the United States Derek Burney argued that there was both an economic and strategic logic for having a seat at the table.

Moreover, the politics did not appear unfavorable. The conservative government had a comfortable majority in Parliament; the business community supported joining the talks; and the Canadian public did not seem nearly as alarmed at the prospect of an agreement with Mexico as the Mulroney government had originally anticipated. The Maclean's poll that found virtual unanimous condemnation of the free trade agreement with the United States found the Canadian public evenly divided on the merits of joining a NAFTA. Indeed, Canadians were less negative than Americans.

The issue was taken up by Mulroney's cabinet during the summer, and the Canadians decided to ask to join. Prime Minister Mulroney was a guest at President Bush's home in Kennebunkport over the Labor Day weekend. Mulroney told Bush that Canada would like to be included. On September 24, Trade Minister Crosbie informed the House of Commons of the change of view: “The government has decided that Canada should involve itself.” ₃₃

The announcement drew predictable criticism from opposition parties, Canadian labor unions, the coalition of environmental activists who had opposed CUFTA, and Canadian nationalist groups such as the Council of Canadians. Maude Barlow, president of the Council, called for a rollback of CUFTA instead. “We want our country back. As long as the free-trade agreement is in effect, no future [Canadian] government will be able to determine the fate of this country.” ₃₄ But the opposition in Canada did not have the same sting that it had before.

At first neither Mexico nor the United States was particularly enthusiastic about having the Canadians join the party, particularly if they were only there for defensive reasons. When Canadian Ambassador to Mexico David Winfield first broached the subject with Jaime Serra in the summer, Serra asked Winfield why Canada had changed its mind. Winfield told him that Canada really wanted to take part, but that Canada did not want to renegotiate the CUFTA. The Mexicans worried that the Canadians weren't serious and that their presence would create problems. This perspective was shared by Bob Zoellick at the State Department in Washington. “I was quite tough on this,” recalled Zoellick. “I didn't want the Canadians to [mess] it up.” Senate Finance Chairman Lloyd Bentsen also expressed strong reservations in a letter to Carla Hills in September. On a trip to Mexico City later in the fall, Bentsen explained his opposition to reporters, “If my wife and I want to settle something we don't want any third parties involved.” ₃₅

At the USTR, however, Jules Katz advocated including Canada. As Katz recalled, “the State Department wanted to say ‘no’ to the Canadians. The veterans of dealing with the Canadians thought they were only going to cause trouble. My view was: How can you say ‘no’? There wasn't any reason for them to cause trouble since what we were trying to do was basically the CUFTA with improvements and extensions.” Moreover, if the long-range goal was to have a hemispheric arrangement, negotiating a series of bilateral agreements didn't make sense. Katz persuaded Carla Hills that the Canadians should be included.

The issue raged on through the fall, with Canadian trade officials lobbying the Mexicans and the U.S. State Department, assuring them that Canada was serious and would not create problems. Eventually the trade ministers—John Crosbie, Jaime Serra, and Carla Hills—met in New York to discuss how to include Canada. Out of the meeting came a “nonpaper,” an informal document that asserted that if any party became obstructionist, the other two parties could continue alone. Not until early in 1991 was it agreed that Canada would be part of the talks. The three countries of North America would seek to negotiate a North American Free Trade Agreement, thereafter almost always referred to simply as NAFTA.

By the time it was finally decided to include Canada, however, any hope of getting a quick start on the talks was dashed and Jules Katz's optimistic timetable of July was moot. Iraq had invaded Kuwait, and the United States was increasingly preoccupied with the buildup of its forces in the Persian Gulf. At the USTR all attention was on the desperate and ultimately futile effort to finish the GATT talks in Brussels. The Canadian request to be included and the agonizing over whether to let them in “threw a monkey wrench in the process,” recalled Chip Roh. NAFTA would now have to wait until 1991.

 

Interpreting the Decision to Negotiate: The Uses and Limits of International Relations Theory

This chapter began with three questions. Why did Mexico, with its history of closed trade policy and cool relations with the United States, seek a free trade agreement with a neighbor it had so long kept at a distance? Why did the United States decide to embrace the overture from the southern neighbor it had so long ignored? Why did Canada, mired in recession and still recoiling from the political aftermath of the CUFTA, first decide to stay out and then change its mind?

With what analytic lens should we examine these questions? A logical place to begin is with international-level theories of international relations. The decision to negotiate NAFTA was a decision to cooperate in an important realm of international affairs, just the kind of matter international-level theories are designed to address. The issue is how well these theories explain the decision and whether one can safely ignore domestic processes at this stage of the NAFTA story.

Each of the international-level theories presented in this chapter provides useful insights. However, international-level theory is ultimately insufficient to explain the decision to negotiate NAFTA and could not have predicted it. To explain why and when Mexico, the United States, and Canada agreed to negotiate NAFTA requires looking beneath the international level to domestic processes.

 

International-Level Theories of International Relations

International-level, or “systemic,” theories of international relations share the presumption that nations are the core actors in an international system, the attributes of which determine national behavior in international affairs. These theories differ, however, in the assumptions they make about the nature of state action, about the character of the international system, and therefore, about the nature of international politics. They differ most starkly on the question of whether national behavior is driven by interests, by institutions, or by ideas.

International Interests: Neorealism

The dominant theory in contemporary international relations is neorealism, or structural realism, an international-level, rational choice theory in the realist tradition that goes back to Thucydides. ₃₆ Neorealism is most closely associated with the work of Kenneth Waltz. Although this theory is largely consistent with the older realist tradition exemplified in this century by the work of Hans Morgenthau, it is more purely systemic in that it obviates any need to consider national characteristics. At its core, neorealism has three tenets. First, states have clear interests, primarily in security. Second, they are rational actors; they have well-ordered preferences, predict accurately the consequences of their actions, and choose the course of action that maximizes their interests. Third, the international system is fundamentally anarchic, so that international outcomes are determined solely by the balance of power and the strategic interplay among states.

As has been noted elsewhere, neorealism is to international relations what neoclassical microeconomic theory, and particularly the theory of oligopoly, is to commercial relations. ₃₇ There is only the most sketchy of theories of the state, as there is of the firm in microeconomic theory. State preferences are given, stable, and essentially symmetric. Furthermore, because the international system is anarchic, i.e., it lacks an overarching coercive power, the system is more a market than a hierarchy. However, because the number of powerful actors is relatively small, large states are not “price takers” but rather interact strategically to maximize their interests.

The Decision to Negotiate: A Neorealist Interpretation

To apply structural realist theory to an international economic issue necessarily requires some modification. ₃₈ Realism and structural realism were developed primarily to deal with issues of war and peace, not economic cooperation. Its emphasis, therefore, on security as the primary value being maximized needs to be expanded to include a somewhat broader concept of national interest, one that includes economic power and wealth. In addition, structural realism's focus on the balance of power is problematic when dealing with international economic issues. Other characteristics of the international system that might matter for economic policy are market power and comparative economic advantage.

A modified structural realist interpretation of the history would argue that Mexico's decision to seek a free trade agreement with the United States was a strategic move in an international game. Lower trade barriers between the United States and Mexico would provide gains from trade, make Mexico more competitive in a world of emerging regional blocs, and most importantly, help Mexico attract much-needed foreign capital. With the fall of the Berlin wall, Europe was preoccupied with the east and Mexico was compelled to look north. The United States decided to negotiate with Mexico because it would benefit from increased trade with Mexico, because a more prosperous Mexico would make the United States more secure, and because a regional agreement would help the United States compete more effectively with Europe and Japan in the long run. Canada decided to join the talks primarily because it recognized that it was better off joining Mexico and the United States at the table than watching them negotiate a bilateral agreement without it.

The extraordinary parsimony of neorealist theory is apparent in this application. Only a tiny portion of the story told in this chapter really matters. Personal revelations at international gatherings, infighting in the United States between the USTR and the State Department, political scars in Canada from past fights over free trade with the United States—none of this detail is relevant. All that matters is the international circumstance in which these three countries found themselves at the moment of decision.

Obviously this is thin description, but parsimony is a virtue, not a vice, if theory can direct our attention to what really matters and successfully predict outcomes on the basis of observable conditions. So the real question is how well the theory actually explains the decision to negotiate. As a first cut it does quite well. Deciding to negotiate is certainly not inconsistent with the tenets of realism. The descriptions of national interests are not inconsistent with how decision makers in all three countries understood the choice. But closer inspection reveals puzzles of some consequence.

Unresolved Puzzles

One set of puzzles relates to the timing of the decision. If a free trade agreement with the United States was in Mexico's interest in 1990, why wasn't it in Mexico's interest before? If anything, Mexico's need for international capital and its marginal gains from more liberal trade would have been greater if it had sought a free trade agreement with the United States in the previous decade. Why did López Portillo respond to the economic crisis in 1982 by raising protection and nationalizing banks? Why didn't de la Madrid initiate free trade negotiations during his term, perhaps in 1985 when the debt crisis was most acute? And what are we to make of de la Madrid's assertion that he would not have entered talks in 1990 because it was politically too risky? A theory that looks only to international circumstance has difficulty explaining this record.

Second, consider the relationship between the fall of the Berlin Wall and the subsequent opening of Eastern Europe, and the decision to negotiate NAFTA. This was clearly of great importance in Salinas's thinking, but it makes little sense from a realist perspective. The opening of Eastern Europe should have had little real effect on Mexico. Aside from West German investment in East Germany, the amount of investment actually going into Eastern Europe was trivial. The Mexicans might have believed that there would be investment diversion, but that type of explanation is not available in a realist model.

Third, consider the timing of the Canadian decision. Why did Canada decide in March to stay out of the talks and in August ask to be included? Nothing of significance changed in the international system between March and August. One could argue that these fine matters of timing are largely noise, irrelevant to eventual outcomes, but the Canadian question delayed the opening of the talks, a delay that had significant consequences, as we will see in the next chapter. Of course, part of the delay had to do with the hesitancy of the United States and Mexico to agree to include Canada, a delay equally difficult to explain given that both countries had an interest in moving quickly.

Deeper puzzles surround the form of cooperation. First is the question of why countries need free trade agreements. Neorealism is compelled to argue that international agreements do not matter. If the international system is inevitably anarchic, why should Mexico, Canada, and the United States seek an agreement to govern their future trade relations? Whatever they agreed upon would be worth no more than the paper on which it was written. If that is the case, why bother going to the trouble of negotiating?

Second, neorealism cannot adequately explain why negotiating is necessary at all. Consider the underlying economics of what was being proposed. From a neoclassical trade economics perspective, opening markets is in a country's national interest regardless of whether other countries do it or not. There are circumstances where this proposition does not hold, but they did not apply here. ₃₉ This is not an international “prisoners' dilemma” game, in which nations face a choice between cooperating and defecting and in which the dominant strategy is defection. Here, the dominant strategy for each party is to cooperate by opening its markets. Why, then, did Mexico, Canada, and the United States need a negotiation to compel themselves to do what they “should” have done on their own anyway? Or, to turn the question on its side, why did these countries have “irrational” protection in the first place?

International Institutions: Regime Theory

Perhaps the most prominent international-level challenger to neorealism is regime theory, a theory that international institutions matter—that internationally held rules, norms, and organizations affect the choices nations make. The community of scholars advocating a role for international regimes, or institutions, is far from monolithic. Two issues in particular divide it. The first is how significant a role regimes play: whether the international landscape is essentially anarchic and only occasionally punctuated by relatively weak regimes or whether the landscape is in fact quite structured by international institutions. The second is an ontological debate between those who see institutions as creations of rational-actor states and those who see international regimes as generative of states and their interests.

Mainstream regime theory comes down on the side of a modest role for institutions and for ontological primacy of the state. ₄₀ Like structural realism, it is ultimately a rational-actor, state-centric theory. Regimes arise through the interaction of rational-actor states in an anarchic system. Regime theory parts company from structural realism, however, in that it allows states to rationally choose in one moment and to be boundedly rational in another. The metaphor of a repeated prisoners' dilemma game in which players develop norms for cooperation, particularly as popularized in Axelrod's The Evolution of Cooperation, is central to this orientation. ₄₁ Although mainstream regime theory concedes an ontologically primary role to self-interested actors, it allows state behavior to be channeled and moderated by international institutions and therefore directs some portion of our attention to the character of those regimes.

The primary role of international institutions is to facilitate mutually advantageous cooperation in circumstances where it might not otherwise occur. Regimes can do this by reducing uncertainty associated with cooperative moves; by raising confidence that others will not exploit cooperation; by lowering transaction costs, often by providing a focal point for coordinating cooperation; or by altering payoff structures, as when the International Monetary Fund (IMF) gives loans on the condition of more open (cooperative) trade policies. Regimes arise when there are international public goods, when there are barriers to cooperation in procuring those goods, and when the density of transactions makes it more efficient to incur the costs of creating an institution rather than to deal with problems on an ad hoc basis. ₄₂

As noted above, mainstream regime theorists join with structural realists in asserting the ontological primacy of self-interested states. Nevertheless, this theory differs in an important regard from structural realism: At the moment of decision, regimes are an independent force and must be treated as (partially) exogenous variables. Regimes created at one moment tend to be “sticky,” to change more slowly than the conditions that led states to create them. Because of the lag, at any one moment of decision, international rules, norms, principles, and processes may not be what states would create at that moment, but given sunk costs and continuing benefits, states maintain the regime.

International Regimes and the Decision to Negotiate

Given the apparent weakness of the international regime between Mexico and the United States, the key initiators of NAFTA, it might appear that international institutions could have had little to do with the decision to negotiate NAFTA. But regime theory can help to explain some of the anomalies not explained well by structural realism.

First, regime theory provides a way of thinking about what Mexico, Canada, and the United States were doing when they decided to negotiate a free trade agreement: They were agreeing to create a new regime. If the negotiation succeeded, new rules would govern commerce among the three nations, rules that would constrain their subsequent actions. The importance these countries attached to the decision to negotiate (and the subsequent effort that would go into actually negotiating) suggests that they certainly believed that regimes matter.

Second, regime theory provides a way of interpreting the timing of Mexico's decision. During the 1980s, international regimes facilitated Mexico's evolution toward embracing a free trade agreement. Mexico's debt crisis provided an opportunity for the international financial regime, particularly the IMF and its conditionality rules, to push Mexico in the direction of greater economic openness. Greater openness led to increased international trade and investment, particularly involving the United States, which deepened the economic relationship between Mexico and the United States, making for a more dense issue area and a need for stronger institutions. A series of small steps—accession to the GATT in 1985, a “framework agreement” with the United States in 1987, an “understanding regarding future negotiations” in 1989—opened information channels, created confidence, and lowered the transaction costs of subsequent negotiation. Each step ratcheted Mexico forward to a position in which the creation of a free trade agreement with the United States was both more feasible and more desirable for Mexico.

Third, regime theory helps explain the particular form that cooperation took. To the question, why a free trade agreement? there is an answer: because that was the choice available under the existing international regime. The possibility of a free trade agreement, the general form of which was defined by the rules of GATT and the specific form by the precedent of the CUFTA, served as a focal point for cooperation. The choice before the three countries, therefore, was not an infinitely variable one. It was, rather, a choice between a free trade agreement or the status quo. Here is a clear example of institutions functioning as “switchmen” in Max Weber's terms. ₄₃

Regime theory suggests that more of the historical narrative is relevant to the questions in which we are interested. It relates the debt crisis, the growing volume of international commerce in North America, and the existing pattern of international agreements to the decision to negotiate NAFTA. As a supplement to structural realism, regime theory solves some of the puzzles left by that theory, perhaps most importantly, why nations would be interested in an international agreement. It does not, however, solve all the puzzles.

Remaining Puzzles

Two sets of puzzles remain, the first about the decision to cooperate, the other about why that decision took so long. First, although the modest growth of arrangements between the United States and Mexico during the 1980s may have made a free trade agreement both somewhat more possible and more desirable, they hardly compelled the next, much larger, step in 1990. Like structural realism, regime theory cannot explain the apparent relationship between the fall of the Berlin Wall and the decision to negotiate NAFTA or the difference made when a much bolder Carlos Salinas replaced the more cautious Miguel de la Madrid.

Second, although regime theory provides a way of thinking about why a free trade agreement would be desirable, it cannot satisfactorily address why there was a problem cooperating in the first instance and why it was so difficult to overcome without protracted negotiations. Mainstream regime theory is designed to explain how nations solve prisoners' dilemma-like problems. But the inter-national trade problem is not a prisoners' dilemma game. Regime theory shares with structural realism an inability to solve the puzzle of why countries would need to negotiate to do what they rationally should do unilaterally.

International Symbolic Politics

A third international-level approach to international relations adopts the position that internationally held symbol systems—ideas, ideologies, worldviews, and the like—affect the behavior of nations, independent of interests or institutions. After a long period of neglect, symbolic, constructivist, and ideational approaches to international relations have recently received more attention from scholars, in part because of the inadequacy of rational choice theories in explaining the extent and, more importantly, the form of international cooperation. Symbolic theories span a spectrum from weak to strong, anchored on one end by modest extensions of rational choice theory and on the other by constructivist approaches derived from sociology and cultural anthropology. Along this spectrum lie four roles for international symbolic constructs.

In the most limited conception of the role of symbols, international symbol systems derive from and ultimately serve national interests. The perspective is essentially economic: Ideas are solutions to collective action failures. As with international institutions in regime theory, symbolic constructs here help reduce uncertainty, lower transaction costs, and provide focal points for coordination. ₄₄ Note that this is quite a benign role for symbolic constructs. They are essentially a public good, created and maintained either by a hegemon, a nation sufficiently large to have a private interest in the public good, or by a collective of nations who manage to negotiate the establishment of the public good.

A second role for symbolic systems is to establish beliefs about cause and effect. Predicting the consequences of policy is often extraordinarily difficult, making it virtually impossible to map precisely from option to outcome. Actors must contend with deterministic complexity, environmental uncertainty, and strategic indeterminacy. Symbolic constructs, more specifically shared causal beliefs, connect choice and consequence. Take, for example, the competing ideologies of liberal trade and mercantilism. Both involve, among other things, mechanisms for connecting policy choices to predicted outcomes. Although each has a complex undergirding of economic reasoning, for the political actors who rely on them, they are largely symbolic constructs. As several scholars have argued, the international convergence of belief around the consequences of adopting liberal trade policies may help account for the level of international economic cooperation among those nations sharing the economic orthodoxy in the second half of the twentieth century. ₄₅

A third role for symbolic constructs is to frame issues so as to make some dimensions of consequence more salient than others. ₄₆ International issues may invoke competing national objectives, for example human rights and physical security, making evaluation difficult. The United States, when confronted with the recent conflict in Bosnia, had interests in both human rights and security. To the extent that the conflict was framed by stories of “ethic cleansing” and metaphors of the Holocaust, the human rights dimension was most salient and the U.S. “interest” became one of preventing genocide. To the extent, however, that the conflict was seen as an intractable civil war and the metaphor of Vietnam was invoked, the security dimension was most salient and the U.S. “interest” became one of avoiding a costly and ineffective entanglement. Different framings, structured by available symbol systems, can trigger different interests.

A fourth and strongest role for symbolic constructs is to determine national interests themselves. The “epistemic community” literature takes the stance that conceptions of national interest can derive from the internationally held symbolic constructs of these communities of shared belief and value. ₄₇ An international environmental community of shared belief, Haas argues, can lead to the greening of national conceptions of self interest. In a sense, symbolic constructs become not merely facilitators within an international system but creators of it. ₄₈ Symbolic systems, of course, may serve more than one of these functions. Ideologies—Marxism, for example—can be at once definers of categories for thinking about possible actions, sets of beliefs about the way the world works, framers of issues, and value systems. Similarly, collectively held historic metaphors (such as Chamberlain's attempted appeasement of Hitler at Munich) also involve, although less expansively, categorization of potential action (appeasement or not), beliefs about the relationship between choice and outcome (appeasement emboldens aggressors), framings of the dimensions of consequence (loss of security), and normative implications (heroic nations fight to stop aggression).

International Symbolic Politics and the Decision to Negotiate

International symbolic theories can help explain aspects of the decision to negotiate NAFTA not well handled by realist or institutionalist approaches. In particular, this perspective allows for an understanding of the specific timing of decision and its relationship to dramatic world events.

Viewed through this lens, Mexico's decision to seek a free trade agreement represents the triumph of an international liberal trade ideology over the ideology of import substitution that had dominated thinking in Mexico and other developing countries. It was no accident that the decision to enter NAFTA came in Davos at a gathering of the world's economic elite, almost all of whom shared the same worldview, or that the deciders for Mexico were products of training in liberal trade economics at leading U.S. universities. The new Mexican elite, welcomed at Davos, became members of an international epistemic community whose liberal trade ideology provided a focal point for cooperation, defined causal beliefs about choice and consequence (free trade leads to economic growth), framed the issue so that some interests were more salient than others (economic efficiency), and established value preferences (free trade is good, protectionism is bad).

Thinking in terms of the power of international symbolism also helps explain why the fall of the Berlin Wall could have served as a catalyst for NAFTA. The event symbolized for the international elites gathered in Davos not only the end of the Cold War, but also the increasing importance of economics in world affairs and the trend toward a new competitive regionalism in the “new world order.” These ideas were all in circulation before the fall of the Wall, of course. Gorbachev's USSR looked far less menacing that its predecessors; economic issues recently had been taking a front seat more often; and with European economic integration and the CUFTA, regional economic arrangements were proliferating. When the premier symbol of the Cold War and the old world order—the Berlin Wall—“fell,” all of this became clear to the Davos contingent.

A symbolic lens can also provide a different perspective on the question of why Mexico would seek a free trade agreement. For Mexico, deciding to seek a NAFTA was a symbolic action intended to dramatize a new Mexico to itself and to an international audience. It was part affirmation of a new sense of identity and in part a pragmatic way of signaling a distracted international financial community.

Limitations of International-Level Theory

Taken together, the three strands of international-level theory can explain much about the decision to enter into the NAFTA negotiations. But purely international theories, alone or collectively, are ultimately inadequate to explain fully the decision to negotiate NAFTA. Most notably, none adequately addresses the core puzzle first identified in the discussion of structural realism: Why do nations need to negotiate agreements to do what is (or is perceived to be) in their national interests? The reason is simple: Systemic theories mis-specify the nature of the problem. The problem in international trade is not fundamentally international. It is, rather, a problem of domestic politics. Nations negotiate international free trade agreements to solve a domestic problem.

International systemic theories have been largely used to consider security rather than trade issues. For issues of security, the variance of interests within nations is relatively low: All share an interest in security. With low internal variance (and assuming strong national political institutions) domestic politics can be more safely ignored and nations presumed to be unitary, if not always completely rational, actors. National interests, however, are usually at least partially in conflict with each other. For this reason the international security can generally be characterized as a multiparty prisoners' dilemma game. This specification of the problem dominates contemporary international relations theory.

In international trade relations, however, changes in trade policy inevitably make winners and losers of domestic interests. When the interests of domestic factions differ strongly, the fiction of a unitary national actor becomes harder to maintain, not just descriptively, but also predictively (whose view of the national interest will prevail for purposes of acting internationally?) and normatively (what is the national interest when there are winners and losers and limited opportunities for internal side payments?). Furthermore, in contrast to security, national economic interests vary little. As noted earlier, the international trade game is not a prisoners' dilemma in any significant way.

So what was the game in the case of NAFTA? Why didn't Mexico, the United States, and Canada simply do what was in each of their individual interests? Indeed, why hadn't they done it long ago? What accounts for the pattern of protection that raised the cost of capital, energy, services, and industrial inputs in Mexico; sugar and tomatoes in the United States; and milk in Canada? (These examples will be discussed at length in chapter 5.) These questions cannot be answered by looking only at the international level. They require consideration of politics at a lower level of aggregation.

 

Domestic and Individual-Level Theory and the Decision to Negotiate

Subsequent chapters will develop an extensive framework for thinking about domestic-level and individual-level politics of international relations. This chapter, however, considers briefly the nature of such theories and applies them in a more ad hoc fashion to the puzzles raised earlier about the decision to negotiate NAFTA.

Domestic-Level Theory

Domestic-level theories based on interests, institutions, and symbols all provide some insight into to the decision to negotiate NAFTA. A focus on domestic interests, in particular, suggests answers to the core puzzles of why nations protect and why they might need a free trade agreement to end protection, and it provides additional insight into the timing of Mexico's decision to pursue such an agreement.

Protectionist policies primarily arise from and are maintained by the interplay of domestic interests. The classic formulation of this phenomenon comes from the work of E. E. Schattschneider, whose core observation was that concentrated producer interests in protection tend to outweigh the more diffuse general consumer interest in free trade. ₄₉ In current political science language, concentrated interests face less of a collective action problem than do diffuse interests in mobilizing to influence policy. International free trade agreements, therefore, serve as vehicles for solving this domestic political problem by bundling together many issues at once and by bringing international pressure to bear on domestic politics. (Chapters 4 and 5 will further develop this thinking.)

Mexico pursued NAFTA in part to help overcome domestic political obstacles to economic reform, including a more open trade policy. The Salinas government, carrying on from its predecessor, was intent on completing Mexico's abandonment of state interventionist and import substitution policies in favor of free market and free trade policies. Some of this it was doing unilaterally, but NAFTA enabled Mexican officials to link numerous reforms together, thus partially overcoming the political logic of protection. (The way in which linking issues can overcome obstacles to free trade is explored further in chapter 5.)

Equally important, a free trade agreement helps to lock in free trade, thus preventing domestic interests from unraveling reforms at a later point in time. This was of critical importance for attracting international capital. NAFTA could make Mexico more attractive to foreign investors not simply by dramatizing Mexico's economic reforms, as suggested above, but perhaps more importantly by ensuring that domestic political forces could not (so easily) reverse them. U.S. policy makers saw NAFTA in much the same light, as a way both to accelerate and to secure more liberal economic policies in Mexico.

For the most part, domestic symbolism worked against a free trade agreement in all three countries. This lens, therefore, does little to explain why they decided to negotiate NAFTA, but it can help explain why they had not done so earlier. In Mexico, embracing the United States ran counter to Mexican political culture. Mexican presidents had always been wary of appearing to be too close to the Americans. In Canada, too, symbolically getting too close to the United States threatened Canadian identity, but Canada had overcome this obstacle when it negotiated the CUFTA. In early 1990, however, the more proximate symbolic problem was CUFTA itself, which had become a symbol of economic failure, and the fear that negotiating NAFTA would stir up a hornets' nest. The U.S. domestic symbolic politics of NAFTA was not particularly salient in 1990 but would become much more so as time went on, and as chapter 7 will show, would become the central dynamic by the end of the process.

The configuration of domestic political institutions also played a role in the decision to negotiate NAFTA, albeit a somewhat more subtle one. The Mexican Constitution, coupled with the near monopoly on power enjoyed by the PRI, gave the Mexican president great power to make a bold decision, even when it might be opposed by strong domestic interests and ran against Mexican political culture. The Canadian parliamentary system and the fact that the Conservative Party was in power gave the Canadian Prime Minister the capacity to take actions that might also engender considerable domestic opposition. Both of these institutional arrangements stand in contrast to those in the United States, where, as the next chapter will demonstrate, a pledge by a U.S. president to negotiate did not actually mean the United States had decided to negotiate.

Individual-Level Theory

Individual-level analysis attends to the interests, habits, and constructed understandings of particular individuals, who may either be elite decision makers or members of domestic groups or the general public. Because the decision to negotiate NAFTA was largely made by elites, however, it is most appropriate to concentrate on them here. Viewed through an individual-level lens, the decision to negotiate NAFTA becomes a story about Carlos Salinas, George Bush, and Brian Mulroney.

A considerable but often neglected literature on foreign policy decision making by elites considers the way in which leaders think, learn, and decide. ₅₀ One strand of the literature emphasizes individual strategic calculations, demonstrating, for example, how interests in personal power compel leaders to take certain actions. Another strand focuses on the way in which personal histories and experiences establish habits of thought and action, illustrating, for instance, how early traumas or triumphs affect subsequent perception and behavior. Still another strand addresses the ways in which individuals construct understandings of the world and locate themselves in it, considering the stories leaders tell about world events and the actions they take. The possibility that leaders apprehend the world symbolically provides a mechanism through which social constructions may influence individual action. Political biographers, of course, apply all of these lenses to their subjects, although not always systematically.

It is well beyond the scope of this book to attempt a biography of the key figures who decided to embark on NAFTA. Nonetheless, certain obvious characteristics of Carlos Salinas, in particular, are worth noting. First, Salinas received a Ph.D. in political economy from Harvard, an experience that not only affected his thinking about economic policy but also likely made him more comfortable with the United States than most of his predecessors (although Miguel de la Madrid had also a degree from Harvard, a master's in Public Administration). Second, Salinas clearly viewed himself as a reformer, who hoped that his place in Mexican history might be that of the president who brought Mexico into the modern era and into full membership in the international community. Third, by temperament, Salinas was a bold politician, notwithstanding his initial reputation as a technocrat. It is hard to imagine Salinas's cautious predecessor, Miguel de la Madrid, initiating NAFTA, as de la Madrid himself admitted.

George Bush's personal makeup was perhaps less crucial to the U.S. decision to negotiate NAFTA; other recent presidents might well have made the same choice (and all of the living presidents would later support NAFTA). But Bush was a free trader, he saw foreign policy generally and NAFTA in particular as an important part of the story that would be told about his presidency, and perhaps of greatest significance, he was comfortable with Mexico. Like many Texans, Bush had none of the reflexive aversion that characterizes some American attitudes about Mexico.

It is harder to say what role Mulroney's personal makeup played in Canada's decision to join the talks. Other individuals in his position might have also felt compelled to do the same. Yet Mulroney too was ideologically comfortable with free trade, and it is worth recalling that it was Mulroney who surprised most political observers in 1984 when he decided to push for a free trade agreement between Canada and the United States, without which there would have been no NAFTA.

Considering these personalities, NAFTA appears to be something of a historical accident, the product of a particular moment in which the three leaders of North America were of like mind and impulse. It is hard to imagine Bill Clinton, Ernesto Zedillo, and Jean Chrétien initiating NAFTA, although to be fair, all would later operate in very different political environments, different in no small measure because of the intervening politics of NAFTA.

 

Conclusions

The preceding analysis has demonstrated how different analytic lenses provide different interpretations of the decision to negotiate. International-level, or systemic, theory provides insights into national motives for seeking free trade agreements but does not adequately solve certain puzzles, most notably why nations protect some products and why they need to negotiate to eliminate protection. Domestic-level theory provides a way of explaining these puzzles by identifying the international trade problem as the consequence of domestic interests. Nations protect not because it is in their interest to protect but because in domestic politics concentrated interests have the power to obtain and defend protection. International free trade negotiations are a vehicle for overcoming this tendency, but the ability of nations to pursue negotiations depends on the strength of interests opposed to free trade, the arrangement of national political institutions, and the nature of symbolic constructs that may make foreign cooperation politically risky. In the end, however, neither international nor domestic factors may fully determine national choice in a particular instance. For that, it may also be necessary to consider the understandings and motives of particular individuals placed in key positions in the national decision making process.

The Mexican decision to seek a free trade agreement with NAFTA was a strategic gambit, taken largely by Carlos Salinas, on both the domestic and international levels. On the domestic level the strategy was to use international negotiation to overcome domestic political opposition to economic reform, a way of accelerating Mexican market opening and of locking it in. Implicit in Salinas's decision was a judgment that the domestic political constraints that may have inhibited his predecessors were not insurmountable. On the international level, the strategy was intended both as a signal to the international investment community and as a means to obtain trade concessions not otherwise obtainable from the United States. The U.S. decision to take Salinas's offer, a decision made by George Bush and his inner circle of advisors, was at once a foreign policy gambit to help Salinas with his domestic problem, a strategy to maintain momentum toward freer international trade, and a domestic political calculation that interests in Mexican market opening would outweigh interests in maintaining what remained of U.S. protection. Prime Minister Mulroney's decision, first to stay out, then to ask in, reflected in the first instance a calculation about the domestic political costs of engaging in free trade, costs essentially resulting from symbolic association with the unpopular CUFTA, and in the second instance a judgment that those political costs had been overestimated and that the Canadian national interest was better served by being at the table with the United States and Mexico.

Why did Mexico, Canada, and the United States decide to negotiate NAFTA? Because of the confluence of many factors, international and domestic, and because national leaders in all three countries seized the strategic opening before them.

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Endnotes

Note 1: Robert A. Pastor and Jorge G. Castenada, Limits to Friendship, 36.  Back.

Note 2: The Mexican Constitution limits presidents to one six-year term in office.  Back.

Note 3: Nora Lustig, Mexico, p. 115, table 5-1.  Back.

Note 4: United States International Trade Commission, Investigation No. 332-282, 3–7.  Back.

Note 5: Nora Lustig, Mexico, p. 15, table 1-1; 22, table 1-5.  Back.

Note 6: Nora Lustig, Mexico, p. 32, table 2-2.  Back.

Note 7: For an excellent account of the role of the Mexican financial community in Mexican politics, see Sylvia Maxwell, Governing Capital.  Back.

Note 8: United Press International, “Leftist Blasts Austerity Plan,” 23 December 1982.  Back.

Note 9: See Luis Rubio, Cristina Rodriguez, and Roberto Blum, “The Making of Mexico's Trade Policy and the Uruguay Round,” in Henry Nau, ed., Domestic Trade Politics, 167–185.  Back.

Note 10: Nora Lustig, Mexico, pp. 117–120.  Back.

Note 11: For an account of the alliance of interests in support of de la Madrid's economic policies, see Robert R. Kaufman, Carlos Bazdresch, and Blanca Heredia, “Mexico.”  Back.

Note 12: Socioeconomic Time-Series Data and Retrieval System, World Data 95 (Washington, D.C.: World Bank, 1996).  Back.

Note 13: United States International Trade Commission, Investigation No. 332-282, 5-1.  Back.

Note 14: Ibid., 5–14.  Back.

Note 15: Sidney Weintraub, Free Trade Between Mexico and the United States? (Washington, D.C.: Brookings, 1984).  Back.

Note 16: Indeed, when de la Madrid was first informed by Salinas in 1990 that he intended both to privatize the banks and to negotiate a free trade agreement with the United States, de la Madrid responded, “Privatizing the banks is a good idea.” A free trade agreement, de la Madrid felt, was “too precipitous.”  Back.

Note 17: For a critical account of the politics of “solidarity,” see Denise Dresser, “Bringing the Poor Back In.”  Back.

Note 18: Joel Kurtzman, “Prospects; Free Trade with Mexico,” New York Times, 22 October 1989, sec. 3, p. 1.  Back.

Note 19: Ibid.  Back.

Note 20: Ross Laver, “Continental Murmurings,” Maclean's, 16 April 1990, 16.  Back.

Note 21: William Branigin, “Quayle Hears Criticism of Kidnapping; Mexican President Seeks ‘New Rules,’” Washington Post, 27 April 1990, A33.  Back.

Note 22: “Mexican President Calls for Free Trade with U.S.,” Reuters, 22 May 1990.  Back.

Note 23: Bruce Stokes, “Trade Talks with Mexico Face Hurdles,” The National Journal, 16 June 1990, 1486.  Back.

Note 24: NBC Nightly News, 11 June 1990.  Back.

Note 25: “International Trade, AFL-CIO Tells House Panel That U.S.–Mexico FTA Would Harm Workers,” Bureau of National Affairs, Daily Report for Executives, 29 June 1990.  Back.

Note 26: John R. Oravec, “Mexico Trade Pact Seen as Detriment to Workers,” AFL-CIO News, 25 June 1990, 3.  Back.

Note 27: Art Pine, “House Panel Embraces Idea of Mexico Pact: Lawmakers Cautioned That They Will Not Enact an Agreement That Sends U.S. Jobs South of the Border,” Los Angeles Times, 15 June 1990, D5.  Back.

Note 28: Anne Hazard, [Untitled], States News Service, 14 June 1990.  Back.

Note 29: Fast track rules state that the Congress cannot amend a negotiated trade agreement and can only vote for or against the agreement as negotiated. The administration deemed this rule essential for negotiating an agreement with Mexico. The rule and its consequences are discussed more extensively in Chapter 4.  Back.

Note 30: Richard Benedetto, “Bush Affirms U.S. Mexico Ties,” Gannett News Service, 26 November 1990.  Back.

Note 31: Speech by George Bush to Monterrery community, Federal News Service, 27 November 1990.  Back.

Note 32: In contrast only 8 percent of Americans thought that it had hurt the United States, 14 percent thought that it had helped, and 78% of Americans either thought that it had made no difference or didn't know. “The Two Nations Poll: Where North Americans Stand on 32 Questions,” Maclean's, 25 June 1990, 50. The poll involved samples of 1000 people in both Canada and the United States and was conducted by telephone between 1 May and 6 May.  Back.

Note 33: “Canada Seeks to Join Mexico–U.S. in Trade Talks,” Reuters, 24 September 1990.  Back.

Note 34: William Claiborne, “Free Trade Foes Are Back: Canadians Seek to Defeat Joint Market,” The Washington Post, 27 September 1990, A22.  Back.

Note 35: Reuters, 28 November 1990.  Back.

Note 36: As noted in chapter 2, classics in the realist tradition include Hans J. Morgenthau, Politics Among Nations; Kenneth Waltz, Theories of International Politics; and Robert O. Keohane, ed., Neorealism and Its Critics.  Back.

Note 37: Robert O. Keohane, “Theory of World Politics: Structural Realism and Beyond,” in Robert O. Keohane, ed., Neorealism and Its Critics, p. 166.  Back.

Note 38: See the argument in Keohane, “Theory of World Politics,” 158–203.  Back.

Note 39: A considerable amount of literature on strategic trade policy investigates this point. See Paul R. Krugman, ed. Strategic Trade Policy.  Back.

Note 40: See, for example, Oran R. Young, “Regime Dynamics: the Rise and Fall of International Regimes,” in Stephen D. Krasner, ed. International Regimes, 93–113.  Back.

Note 41: Robert Axelrod, The Evolution of Cooperation.  Back.

Note 42: Robert O. Keohane, “The Demand for International Regimes,” in Stephen D. Krasner, ed., International Regimes, 141–171.  Back.

Note 43: The observation is made in Judith Goldstein and Robert O. Keohane, “Ideas and Foreign Policy: An Analytical Framework,” in Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy.  Back.

Note 44: For an exploration of this role for ideas see Geoffrey Garrett and Barry Weingast, “Ideas, Interests, and Institutions: Constructing the European Community's Internal Market,” in Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy, pp. 173–206.  Back.

Note 45: See in particular G. John Ikenberry, “Creating Yesterday's New World Order: Keynesian ‘New Thinking’ and the Anglo-American Postwar Settlement,” in Judith Goldstein and Robert O. Keohane, eds., Ideas and Foreign Policy, pp. 57–86.  Back.

Note 46: See William H. Riker, “Heresthetic and Rhetoric in the Spatial Model,” in James E. Alt and Kenneth A. Shepsle, eds., Perspectives on Positive Political Economy.  Back.

Note 47: Peter M. Haas, “Introduction.”  Back.

Note 48: See especially Alexander Wendt, “Collective Identity Formation.”  Back.

Note 49: E.E. Schattschneider, Politics, Pressures and the Tariff.  Back.

Note 50: See, for example, Alexander L. George, Presidential Decisionmaking, and Alexander L. George, “The ‘Operational Code.’”  Back.

 

Interpreting NAFTA : The Science and Art of Political Analysis