NAFTA Is Working

Trade: The Three Amigos at the summit in New Orleans this week shouldn't have to restate how much NAFTA benefits their nations. But now under fire, the leaders will have to defend free trade like any freedom.

---

---

Fourteen years after the 1994 North American Free Trade Agreement was signed, President Bush, Mexican President Felipe Calderon and Canadian Prime Minister Stephen Harper's meeting in New Orleans this week is a vivid testimony to NAFTA's success. The three leaders, ironing out their differences peaceably, provide a beacon to the region about the benefits of mutual economic growth.

They all have something big to show for it. The U.S. economy is now 50% greater than it was in 1994. Mexico's GDP is 46% bigger and Canada's is up 54% since joining the world's largest free trade zone, where total trade now stands at nearly $1 trillion, three times what it was before the deal was struck.

As for Americans, NAFTA puts between $140 and $720 more income into the pockets of the average family of four each year, while tariff-scrapping has cut taxes another $210.

Mexican and Canadian incomes have risen comparably, with Mexico reporting the highest per capita income in Latin America.

With such a result from just dropping tariffs and leveling the investment playing field, it is little wonder that 10 other countries in the hemisphere want the same free trade benefits.

Yet free trade is under fire from many places, ranging from know-nothing populists to Big Labor bosses who see a threat to their privileges, all the way down to the newly emerging leftist states in Latin America that seek to end the private sector altogether.

For the first two groups, Democratic candidates Barack Obama and Hillary Clinton have sought to exploit free-trade fears, which are irrational and exaggerated. They have vowed to scrap NAFTA and give back the faster economic growth and higher incomes that come with it. They obviously aren't going to take part in any three-amigos dialogue, as seen by the leaders of this NAFTA summit.

Meanwhile, Latin America's leftist leaders have a perfectly rational hatred of free trade: Simply put, it threatens their interests.

For caudillos like Venezuela's Hugo Chavez, who publicly insulted Mexico's last president, Vicente Fox, in 2005 for standing up for expanding free trade, it's a major threat to his plans to dominate the region through an alternative network of nations with state-owned companies commanded by dictators.

His Cuban allies also hate free trade. On April 9, Cuba held a "Conference of Struggle against Free Trade Agreements" in Havana.

As we noted, free trade is their enemy. It empowers the private sector, making individuals rich, and creates incentives for peace.

This is at odds with Latin America's new leftist dictatorships, which seek to end the private sector, make the population depend on the state and mobilize the masses in a war against "capitalism."

That's why free trade is very much in the interests of advancing democracy and prosperity. The three amigos at this New Orleans summit know well how much free trade has strengthened their nations by empowering their private sectors.

With NAFTA under fire as never before from so many directions, a strong stand will be critical to the future of all three.