All Commentary
Saturday, May 1, 1993

The NAFTA Analysis: Not Free Trade

It is difficult to see how 1,700 pages of government rules and regulations can free trade.

Although touted as “free trade,” the North American Free Trade Agreement (NAFTA) is anything but. “Free trade,” by definition, is freedom from government in bartering and exchanging. Governments step aside and allow the peoples of their respective countries to exchange goods and services or associate with the peoples of other countries without any (or very little) government interference.

NAFTA is over 1,700 pages long–741 pages for the treaty itself, 348 pages for annexes, and 619 pages for footnotes and explanations. It is difficult to see how 1,700 pages of government rules and regulations can free trade. By definition, free trade is the removal of government from the trading process, not its expansion.

Specific provisions of the treaty prove that it is the opposite of free trade. It sets up a “Free Trade Commission” and a new bureaucracy under this commission called the “Secretariat.” This commission, composed of unelected officials from the participating countries, will interpret the treaty and impose its decisions on member nations. It also will resolve conflicts and enforce its decisions. This is not free trade, but an establishment and expansion of international bureaucracy over sovereign nations’ trading policies.

True free trade would eliminate tariffs. NAFTA not only keeps current tariffs in place during a fifteen-year “transition period,” but also permits these tariffs to continue after this period “with the consent of the [nation] against whose good the action is taken.” NAFTA also allows government subsidies and import quotas to continue. NAFTA will also gradually impose the strict environmental guidelines of the United States on the countries which signed the treaty.

If national leaders really wanted free trade, they could abolish unilaterally any barrier that hinders trade with other countries: tariffs, quotas, subsidies, regulations, licenses, passports, everything.

—Joe Ogrinc

Medicare Rules

Look at it this way. How would you feel about your job if it were governed by Medicare rules? You might be paid or you might not, and you couldn’t tell which before you did the work. In order to receive payment, you would have to fill out a complicated form at least once (often more than once). Quite often you would have to fight with a bureaucrat and answer insulting and threatening letters. The maximum rate of payment would usually be substantially less than you could make by doing something else, for example, treating a younger person. And if you made a mistake in your paperwork, or offended a bureaucrat by acting disrespectful, or did something that was declared unnecessary after the fact, you might have to give all the money back, plus $2,000 for each mistake. Worse, you might even be forced out of your occupation altogether. Would you continue in a job like this? More doctors are saying that to accept a check from Medicare, you’d have to be crazy.

—Jane M. Orient, M.D.

National Service

Some years ago Germany enacted a “Law for National Labor Service” that required one year of service for every youth between the ages of 18 and 29. Like the current American proposals, the service was part military and part civilian. The plan was initially voluntary, but was made mandatory after two years.

The proponents of the German national service law promised that all work “undertaken by the Labor Service may only be supplementary, i.e., work which would not be undertaken in the ordinary way by private enterprise.” Similar promises are made by contemporary American supporters of national service.

The German plan also praised collectivism and sharply criticized individualism and the market system. It advocated that young people be made to perform “service rendered to the German nation,” and its overall purpose was “to lift men out of economic interest, out of acquisitiveness, to free them from materialism, from egoism . . . .”

The Hitler Youth were institutionalized by the “Law for National Labor Service,” which operated under the premise that “the child is the mother’s contribution to the state.” This was the ultimate in national socialism: the nationalization of people.

This is not to suggest that the American supporters of national service are fascists or “national socialists,” but to underscore what a tremendous threat to individual liberty such a program entails. Current American proposals may not sound too threatening since they are supposedly voluntary. But the Nazi program also was voluntary when it began, and, as mentioned above, there already are many powerful political supporters of mandatory national service in the United States. For these reasons, national service could pose one of the greatest threats to freedom in the coming decade.

—Thomas J. DiLorenzo