The success in renegotiating NAFTA offers a useful opportunity to look back over 25 years to its first passage and its impact on one Baltimore company, Ellicott Dredges.
Ellicott, which was already a 100-plus year old manufacturer and exporter of dredging equipment (its dredges were used in the original construction of the Panama Canal), unwittingly became the national poster child for NAFTA. The campaign to approve it gave everyone who worked at Ellicott unforgettable experiences and appreciation for the politics of trade.
In 1993, Bill Clinton assumed office after George H.W. Bush’s administration had made passage of NAFTA its key economic and diplomatic priority. Surprisingly Mr. Clinton and his team picked up the baton and adopted NAFTA ratification as their own hill to die on. An incredible congressional fight ensued, with each vote courted and cajoled every way possible. Labor, a key Democratic constituency, generally opposed it.
One aspect of the strategy was to send cabinet members to major cities to solicit support. Transportation Secretary Federico Peña came to Baltimore, and the mayor suggested he use Ellicott as a venue for a speech, given our experience in selling to both Canada and Mexico. Mr. Peña took advantage of a dramatic opportunity. At the time, Ellicott had a unionized labor force with the United Steelworkers. Because the union knew that trade was good for the company and their jobs as well as they knew each dredge’s foreign destination, they answered “yes” when Secretary Peña asked them if they would endorse NAFTA — in writing. He drafted and gave them a letter to sign on the spot before they realized the political ramifications. The Ellicott steelworkers became one of only a handful of union locals nationally to endorse NAFTA.
The White House calls started the very next day, and by the time NAFTA had been passed months later, I don’t think we had a single employee who hadn’t met the president or a cabinet member at least once or didn’t have the chance to visit the White House. It became a game of, “It’s your turn to go” — “no, I went yesterday!” Our company took great pride in helping to pass NAFTA, and without regrets despite the national unions pressuring our local to retract its endorsement. In the decades that followed, with duties reduced, our sales to Mexico and Canada grew to the point where they exceeded our overall sales at the time of NAFTA’s passage. NAFTA was good for our employment and the Baltimore economy.
Then, as now, one of the problems with trade agreements was that each side exaggerates the potential benefits or risks to make their point. The truth is much more nuanced and buried in details that are very complicated and hard to appreciate.
While NAFTA was good for Ellicott, we need to recognize that there were losers and that the internet and all its associated business did not even exist when it was conceived. So an update was entirely appropriate.
President Donald Trump’s critics may be unable to acknowledge any success by his administration, but NAFTA 2.0 — a.k.a. the U.S.-Mexico-Canada Agreement, or USMCA — has not only the unequivocal support of the National Association of Manufacturers, but it also won praise from the United Steelworkers and even Senate Minority Leader Charles Schumer. So once again a North American trade agreement looks to advance our economic interests. Our farmers too have reason to applaud the new arrangement even if in a minor way. It’s not often mentioned, but it’s also reasonable to conclude that a stronger North American economy, including Mexico, reduces incentives for illegal immigration.
So let’s hope the congressional approval process, whose path will be uncertain after the upcoming midterms, will endorse this trade policy achievement.
Peter Bowe (email@example.com) was CEO of Ellicott Dredges for decades until his retirement earlier this year. He continues as a board member and is a founder and trustee of the Bowe-Stewart Foundation.