How Much Harm Will it Do?

Stan Duncan

Now that we have raised the debt ceiling (or paid off the hostage-takers, depending on your point of view) it might be a good time to review how much damage the deal will do to the economy, to the recovery, and to ordinary people trying to hold down jobs.

Before I try to total that up, here is a brief overview of how we got here. You can skip down if you already know all of this.

Where did it come from?
Our US debt itself (the fact that we have borrowed money) has been around for a long time, but the deficit (the fact that we spend more than we make) was pretty much eradicated during the Clinton years. When president Clinton left office we had a surplus of about $412 billion and we were on track for eventually paying down the total debt itself (which was about $8 trillion). When President George Bush left office eight years later, the entire surplus was gone. The deficit had grown to over $500 billion, and the debt was around $14 trillion.


Liberals and conservatives argue over how much influence President Clinton or the high tech explosion had to do with that, but the fact remains that we had a surplus during his administration. He raised taxes and social spending and unemployment went down. And when people are employed they pay taxes. Remember that part: when people are employed, their taxes pull down the deficit.

President Bush had two unfunded wars, three unfunded tax cuts (one in the spring of 2008 that no one talks about), an unfunded prescription drug program, and a recession. The unfunded programs and tax cuts were like paying money out and the recession kept money from coming in (actually the recession did both: tax revenue went down and expenditures for unemployment insurance, food stamps, etc. went up).

At the end of 2008 and the beginning of 2009 both the Bush and Obama administrations spent hundreds of billions in stimulus to help stave off an economic meltdown. However, a good amount of President Bush’s spending was in loans to Wall Street, which have been paid back, and much of Obama’s was for jobs, which came back in terms of workers paying taxes, so in the long run neither of their programs impacted the deficit in the way that the wars, tax cuts, the drug program and recession did. Economists differ on how much all of these things drove up the deficit (see my previous post on that), but by any estimate except Rush Limbaugh’s, when President Obama took office the US deficit had soared upwards by trillions of dollars.

To be fair, this description of the origin of the deficit comes mainly from economists and observers from the right, left and center. There is an alternative view from people like Senate Minority Leader, Mitch McConnell (R-Ky), who argues that the deficit is the result of the “out of control spending” of unnamed members of Congress (apparently Democrats) between 2000 and 2008, and the “Job-killing tax increases” that President Obama might be pushing on us one of these days. Even though evidence for this view is difficult to come by, it seems to be the predominant opinion held by the media, the White House, and both houses of Congress.

So, where are we now? 

At the beginning of 2011, the Republican leadership in Congress announced that they had kidnapped the debt ceiling and would not let it go free until they had been paid an astronomical ransom in cuts in social spending. And if the Obama administration did not agree to their demands, they would blow up the economy by refusing to allow the federal government to borrow money. That act would throw our tepid recovery back into a deeper recession, families and jobs would be ruined for decades, and our future as a global economic player would be in jeopardy. They didn’t really want to do it, they said, but they had no choice because otherwise somewhere a few decades from now there might come a time when someone might get hurt if they didn’t do it. (They didn’t put it in quite those terms, but you get the idea.)

It is a form of what I call “Economic Apocalypticism,” the belief that we need to cause a catastrophic human apocalypse right now, with pain, suffering, and hunger, in order to create a pure capitalist order generations from now for our grand children. As examples of this, look at the draconian cuts in social spending imposed on poor and developing countries in the 1980s by the IMF and the resulting rises in poverty, homelessness, and illiteracy. It is sometimes referred to as “Shock Treatment” by economists like Jeffrey Sachs and others. It means: cause agony and death for hundreds of thousands of innocent people right now on the gamble that their grandchildren might be able to claw their way back into a middle class life years from now. The theory was common currency in the economic development circles of two decades ago and is apparently also behind the death threats of Congressional Republicans today.

The Democrats and the Obama administration inexplicably believed that the Republicans were not bluffing in their threats to destroy the economy, and moved into protracted hostage negotiations over how much to give up to keep them from killing the planet. Then, according to House Speaker John Boehner (R-OH), Congress agreed to ninety-percent of their demands, with an additional promise that a bi-partisan panel will be set up to decide how much more will be given to them later.

So, what is the damage?

Let’s begin by acknowledging that cuts in social spending will hurt the economy and drive up the deficit. We often hear that it will, of course, also cut the deficit, but not by as much as you think because the people you fire will no longer pay income or sales taxes. Firing people can lower the deficit, but it also to some degree increases it—that in addition to causing fear and pain to millions of innocent families. Cutting social spending in the middle of the worse job losses in seventy years is much like bleeding hemophiliacs to see if it will help them get well. It wasn’t successful in the 1200s, and it probably will not work today.

How much damage will it do? First, the debt reduction plan will cut $3 trillion from Federal spending over 10 years. That comes out to about $300 billion in spending reductions per year. The higher amounts of that, however, are set to be cut in future years so that people won’t feel as much of it before the elections, so for our present numbers let’s assume that only $100 billion will be cut next year.

So, deduct that $100 billion from our annual spending, which is presently around $3.5 trillion, and it will shrink the GDP by about 3%. (The math is 100/3,500.) That, by the way, is probably a bit low because it doesn’t take into account the “Multiplier effect.” Every time a dollar changes in hands there is a value added to it, which adds to the GDP. Direct Government expenditures can increase the GDP by anywhere from 1.20% to 1.75% (tax cuts, on the other hand, are usually a loss). So, the overall loss to the economy is probably larger than my simple equation.

According to a rule of thumb called “Okun's law,” if the GDP is depressed by 3%, then the unemployment rate should go up by about half that, or 1.5%. That is of course, assuming that only jobs will be cut and not waste, so to be fair, let’s assuming that in this first year we will only drive up unemployment by 1%.

Right now unemployment in America is 9.2%. Add another one percent to that and we get 10.2%. What this means is that the number of jobs lost by this act then, comes out to be about 1.5 million jobs next year. And that’s just at the start. More government-caused job losses are to come. Each year they will get larger; each year we will depress the GDP further and hurt families deeper.

Already cut backs in jobs and benefits on state and local levels are one of the major contributing factors in our high unemployment and low tax revenue and the first line of hurt will be state and local governments. One out of every three dollars of state spending comes from the federal government — $478 billion alone in 2010. That will definitely be cut. In the first half of 2011 almost all of the job gains in the private sector were lost again by firings in the public sector. From August 2008 to the present, over 577,000 jobs have been lost to government belt-tightening.

Some of the biggest items that are to be cut in the bill are spending on education and Medicaid for the poor That won't hurt many in Congress, who are generally richer than "average" Americans and prefer private schools for their children, but for the rest of us, it could be one more step in our national decline. Note that nearly every state government has already set its budget for the next two years assuming a certain amount of federal dollars to come in. With this bill, all of those programs will have to be cut back. Local governments will probably try to raise property taxes to raise revenue, but that would be one more drag on the housing market that’s already dragging the bottom. Many local municipalities are already filing for bankruptcy and that will accelerate depending on how fast Washington’s cuts begin impacting them.

As long as we believe that the pain and fear of our recession is not related to Wall Street gambling, Mortgage loan scandals etc., but out-of-control spending by God knows who in our pasts, and that the only way out of it is through cuts in taxes for the wealth and benefits for the poor, and that the only way to find God’s final realm for the next generation is by balancing our checkbook on the backs of the poor, the sick, the elderly and the very young, then we will continue to decline into what looks from this side as an abyss of madness and evil…but that’s just my opinion.

Dilemmas of American Empire

Can Obama Pull Off a Game-Changer in Iraq, Iran and Afghanistan?

By Gary Dorrien

http://www.religiondispatches.org/archive/international/1552/

In the wake of the Bush administration’s disastrous resort to neoconservative ideology the Obama Administration is seeking to reclaim the liberal internationalist and diplomatic way of relating to the world. The United States is going to be an aggressive imperial power no matter whom it elects as president; what is called “neoconservatism” is merely an extreme version of normal American supremacism, one that explicitly promotes and heightens the U.S.’s routine practices of empire. But it matters greatly whether the American empire tries to work cooperatively and respectfully with other nations instead of conspiring mainly to dominate them. In Iraq, Afghanistan, Iran, and the Middle East as a whole, the legacy of George W. Bush is not very good and Obama has an overabundance of leftover crises to manage.

In Iraq the U.S. is slowly withdrawing military forces while in Afghanistan the U.S. is escalating; but in both cases the work is grinding, perilous, and ambiguous. There are no breakthroughs coming in Iraq or Afghanistan. The fix is in, and the new administration is simply trying to find a decently tolerable outcome. Iran is a different story diplomatically, where there is a real possibility of a breakthrough, but also the greatest danger.

‘We hate you because you are occupiers, but we hate Al Qaeda worse, and we hate the Persians even more.’

From March 2005 to April 2007 the eruption of a civil war, in the midst of an already ferocious insurgent war, in Iraq produced huge numbers of weekly attacks and casualties, averaging 2,000 attacks per month. The numbers then dropped dramatically as ethnic cleansing was completed in many areas, the “surge” of U.S. forces restricted the flow of explosives into Baghdad, the Mahdi Army suspended its attacks, and the U.S. co-opted Sunni insurgents. But violence has spiked again recently; it’s a perilous business to depend on buying off the opposition; and most importantly, the fundamental problems that fueled the insurgency and civil war still exist in Iraq. Meanwhile the U.S.’s price tag is approaching $2 trillion, as predicted by Nobel-prize winning economist Joseph Stiglitz and Harvard professor Linda Bilmes back in 2006.

All of this will take decades to play out, well beyond the blink of an American news cycle. Iraq is broken into rival groups of warlords, sectarian militias, local gangs, foreign terrorists, political and ethnic factions, a struggling government, and a deeply corrupted and sectarian police force. The Sunnis are appalled that a Western invader paved the way to a Shiite government allied with Iran. They are deeply opposed to the new constitution. They want a strong central government that distributes oil revenue from Baghdad, and they are incredulous that the U.S. has enabled Iran to become the dominant force in the Middle East. The Shiites are embittered by decades of Sunni tyranny in Iraq and centuries of Sunni dominance in the Middle East. Arab Shiites have not tasted power for centuries, and Iraqi Shiites are determined to redeem their ostensible right to rule Iraq that was denied them in 1920.

Both sides and the Kurds have militia groups that are the real powers in Iraq. The main thing that has worked in Iraq is the U.S.’s desperate gambit to co-opt the Sunni militia groups aligned with the Awakening Movement. In the counterinsurgency playbook, buying off the opposition is a last resort. The French, British, and U.S. tried it, respectively, in Algeria, Malaya, and Vietnam. In each case the weapons given to insurgents ended up being used against the forces providing them. In this case, over 100,000 Sunni fighters have been put on the U.S.’s weekly payroll. Major General Rick Lynch, commander of the Third Infantry Division, explains why it is working, so far: “They say to us, ‘We hate you because you are occupiers, but we hate Al Qaeda worse, and we hate the Persians even more.’” In this lexicon, Iraqi Shiites are Persians, like the Iranians.

So the U.S. is paying and arming Sunni insurgents to kill people in the middle group, even as they profess to hating Shiites most of all. It’s not clear how the Awakening fighters will be removed from the dole, and Shiite leaders are not sympathetic to the U.S.’s predicament. The cooptation strategy has deeply enmeshed the U.S. in Iraqi tribal politics, lifting up certain tribes over others, and corrupting them. Tribes are forming their own militias and creating new leaders adept at cutting deals and getting access to money that was supposed to pay for reconstruction. The predatory corruption of government officials and connected tribal leaders is pervasive, direct, and unrelenting, which helps to explain why $200 billion of reconstruction aid has produced almost no reconstruction.

Iraq could explode again at any time, because Sunni leaders are demanding real power, the Shiite parties are determined not to yield it, and intra-sectarian resentments are boiling. Shiite and Kurdish leaders are stonewalling against integrating Sunnis into the army, and they are gathering the fingerprints, retinal scans, and home addresses of every Awakening fighter.

Despite all of this, important political gains have been made in the past year. Parliament is grappling seriously with the Baathist reconciliation problem, which requires tough political bargaining, and the recent provincial elections brought more Sunnis into the political process. Prime Minister Maliki, toughened by 24 years of brutally difficult exile in Iran and Syria as a functionary of a tiny, persecuted Islamist party—the Dawa Party—has proven to be a more resilient leader than many expected. To make a real difference, Iraq needs an oil deal, a new constitution, a resolution over Kirkuk, and a national election that brings more Sunnis into the government. Most difficult of all, it needs to integrate large numbers of Sunni forces into the army and police force. Above all, it needs to get the U.S. Army out.

The toxic politics of collaboration and betrayal

On the latter issue, we need to be resolute and pragmatic at the same time; and by “we,” I mean our religious communities, the movements for social justice, and the Obama Administration. President Obama has significantly compromised his campaign promise to withdraw most or all U.S. troops within 16 months of taking office. His current position is that 65 percent of our force structure in Iraq will be removed by August 2010, and all our combat troops, leaving up to 50,000 troops there in non-combat roles until December 2011. He stresses that the combat mission will end at the end of next summer, more or less as he promised, and that we need to keep a heavy force in Iraq for at least 15 months beyond that. Last month the U.S. relinquished one of its largest military bases in the Green Zone, the dramatically named Forward Operating Base Freedom. But two weeks later the administration announced its plan to keep indefinitely the entire Camp Victory complex, which has five large bases in Baghdad, and Camp Prosperity and Camp Union III, which are located near the new American Embassy in the Green Zone.

There are more announcements of this sort to come. Defense Secretary Robert Gates is already saying we will need to keep some military forces in Iraq beyond December 2011, beyond simply protecting the embassy. It isn’t clear what the distinction between combat and non-combat will mean. All soldiers are trained to fight, which the Army is currently stressing in its press statements. If a civil war breaks out, will U.S. troops take action? If not, what is the rationale for 50,000 troops? It is ethically imperative for the U.S. to be careful and deliberate in extricating itself from Iraq; we must avoid the mistakes of the British in India, the French in Algeria, and the U.S. in Vietnam. Obama gets that part. What he needs to hear is that his core supporters are serious about getting out of Iraq and are not willing to be strung along for years with half-measures.

Once an empire invades, especially a self-righteous one like the U.S., there are always reasons why it thinks it cannot leave. But sooner or later, conquered peoples have to be set free to breath on their own to regain their dignity. As long as the U.S. Army is the ultimate power in Iraq, Iraq will have no sovereignty; Shiites will be viewed in the Sunni provinces as collaborators with the invader; and Sunnis will view the Iraqi army as a creation of the invaders that puts their enemies in charge. When the occupier pulls back, the toxic politics of collaboration and betrayal will be lessened. The civil strife in Iraq is going to play itself out no matter what the U.S. does. But the U.S. set it off and we are refueling it every day we remain.

In the past two years the U.S. has, in effect, created a Sunni Army. The fate of this entity trumps a long list of daunting variables in Iraq. Sunni leaders protest constantly that the nation’s interests against Iran are not being defended. If the Sunnis and Kurds can be integrated into the Iraqi Shiite Army, which is euphemistically called the Iraq Army, Iraq has a chance of holding together as a semi-federalized state. There is no other option that averts another upsurge of death and destruction.

Advocates of breaking Iraq into three nations stress that parts of the country are already partitioned; all three of the major groups have their own military, and the Kurds have their own government and oil deal too. But the majority of Iraqi cities and provinces still have Sunni and Shiite communities living side by side. Iraq cannot break apart without igniting a horrible civil war, one that Iran, Syria, Turkey, and Saudi Arabia would not sit out. The best hope is that Iraqis will decide for integration and sovereignty, but it is up to them to decide whether they want a unitary state, a decentralized federation, three nations, or something else. I don’t want President Obama to make that decision or to commit U.S. troops to one of these outcomes. We must hold the Obama Administration to leave Iraq by a time certain, relinquish all the military bases, and support the rebuilding of a shattered society.

Wanted: an anti-imperialist peace movement

Today we have the right president to repair the terrible damage to the U.S.’s image in the world, especially the Middle East, as Obama’s eloquent speech in Cairo demonstrated. But he is escalating the war in Afghanistan, with a rationale that leads straight to more escalation and virtual occupation.

The president has already added 17,000 combat troops and 4,000 trainers to the force of 37,000 that we had in Afghanistan. He is talking about doubling that escalation, says we have to shore up the government, and he is planning to double the size of the Afghan army with U.S. taxpayer funds. What he has not done is explain how or when we will know if any of this ramping up has succeeded.

After nearly eight years of war, Afghanistan has “quagmire” written all over it. The government is corrupt from top to bottom. It barely exists outside Kabul except as an instrument of shakedowns and graft, beginning with the family of President Karzai. The Afghan army is part of the corruption plague and opium production is expanding dramatically. More than two-thirds of the economy is centered on opium traffic.

The United States has a vital interest in preventing Al Qaeda from securing a safe haven in Afghanistan. But escalating to 60,000 troops, and warning that more may be necessary, suggests some larger objective that has not been explained or defended. If the U.S. is going to pour more troops into a country featuring a chronically dysfunctional government, treacherous terrain, a soaring narcotics trade, and a history of repelling foreign armies, it needs to spell out what, exactly, this escalation is supposed to accomplish and how the U.S. will know it has succeeded enough to get out or even to scale down.

I am more hopeful, though equally wary, about the situation in Iran, where the Bush legacy is disastrous. In 2001 Iran had a few dozen centrifuges and the government of President Mohammad Khatami helped the U.S. overthrow the Taliban regime in Afghanistan. Khatami negotiated with the U.S. in the wake of 9/11, closed Iran’s border with Afghanistan, deported hundreds of al Qaeda and Taliban operatives who had sought sanctuary there, and helped establish the new Afghan government. The Bush administration could have spent the succeeding years further negotiating with Iran, limiting Iran’s nuclear program, allowing it to buy a nuclear power reactor from France, and restraining it from flooding Iraq with foreign agents. Instead, Bush arbitrarily ended talks with Iran, famously consigning it to the “axis of evil.” Iran responded by electing an eccentric extremist, Mahmoud Ahmadinejad, to the presidency, developing over 5,000 centrifuges, and threatening Israel. We barely averted a catastrophe in 2006, when Bush and Cheney wanted to bomb Natanz with a nuclear weapon until the Joint Chiefs rebelled against them.

Today there is a serious possibility that the Netanyahu government in Israel will carry out the bombing option. If it does, the entire region could explode into a ball of fire. That’s the apocalyptic scenario. The hopeful one is a game-changer based on two or three years of sustained diplomacy. The U.S. could declare that it recognizes the legitimacy of the Islamic Republic of Iran. It could acknowledge Iran’s right to security within its present borders and its right to be a geo-political player in the region. It could accept Iran’s right to operate a limited enrichment facility with a few hundred centrifuges for peaceful purposes. It could agree to the French nuclear power reactor and support Iran’s entry into the World Trade Organization. And it could return seized Iranian assets. In return Iran could be required to cut off its assistance to Hezbollah and Hamas, help to stabilize Iraq and Afghanistan, maintain a limited nuclear program for peaceful ends verified by the International Atomic Energy Agency, adopt a non-recognition and non-interference approach to Israel, and improve its human rights record.

Any deal of this sort would be a dramatic breakthrough in the Middle East. It would have a positive impact on nearly every major point of conflict in the region. It would be the opposite of the Bush-neocon approach, which demonized Iran and plotted attacks against it. Obama may be the ideal president to pull off a game-changing deal with Iran. The Iranian people are remarkably inclined to pro-Americanism. The clerics that rule Iran might be willing to seize this moment, which would enhance their stature in world politics. If Obama is the president to make it happen, he will have to stand up to a firestorm of opposition in the U.S. and probably overrule his key officials in this area, Hillary Clinton and Dennis Ross. And he will have to risk offending most of Israel’s political establishment, to get something that is actually better for Israel.

Regardless of what Obama does or does not do, we need a defiantly anti-imperial peace movement that rejects the American obsession with supremacy and dominance. Forty years ago, Senator William Fulbright warned that the U.S. was well on its way to becoming an empire that exercised power for its own sake, projected to the limit of its capacity and beyond, filling every vacuum and extending U.S. force to the farthest reaches of the earth. As the power grows, he warned, it becomes an end in itself, separated from its initial motives (all the while denying it), governed by its own mystique, projecting power merely because we have it.

That’s where we are today. Now as much as ever, we need a self-consciously anti-imperial movement that seeks to scale back the military empire and opposes invading any more nations in the Middle East or Latin America or anywhere else.

Gary Dorrien is the Reinhold Niebuhr Professor of Social Ethics at Union Theological Seminary and Professor of Religion at Columbia University. He is the author of 14 books and over 225 articles ranging over the fields of social ethics, political theory, theology, philosophy, and intellectual history. His most recent book is Social Ethics in the Making (Wiley-Blackwell, 2009). This article is adapted from a lecture he gave in a spring 2009 course and public forum titled “Christianity and the U.S. Crisis,” which he co-taught with Cornel West and Serene Jones at Union Theological Seminary.

© 2009 Religion Dispatches. All rights reserved.
Source: http://www.religiondispatches.org/archive/international/1552/

The Mexican Truckers' Dispute--a Backgrounder

You have probably read something (or more than something) already about the ongoing dispute between the US and Mexico over our broken promises to lift a ban on Mexican trucks coming into this country. Recently there has been one more lawsuit filed by Mexico against the U.S. over it. Here is a bit of background about the dispute that can put the issue in context.

The dispute actually goes back to 1982 when the U.S. Congress passed a law banning the entry of foreign trucks. Actually the official language was that foreign trucks would not be allowed to operate within the U.S., which effectively meant a block at all of the borders to their entry. The stated reason was that foreign trucks were not as clean or safe as our trucks. The unstated reason was that our truckers wanted in on the business. Eventually Canada lobbied and got the ban lifted from their trucks, leaving Mexico to be the only dirty, unsafe country on the list. For the next thirty years, no matter what Mexico might do to clean up its trucks or professionalize its drivers, the ban stuck. Eventually having little to do with the first reason and a lot to do with the second.

What they have to do is, when a Mexican truck full of, say, corn or televisions or cars, comes to the border, it has to stop, be emptied out, reloaded on a U.S. truck with a U.S. driver and off it goes. It is a lengthy, expensive way to do business. For Mexican trucking companies, the difference in costs between the Mexican drivers they hire on their side of the border and the U.S. drivers they have to hire on our side is significant and Mexico has been complaining about it from the start. In the suit filed this year they note that it adds an additional U.S. $2 billion each year to their costs.

In the late 1980s and early 1990s, when NAFTA was being negotiated, Mexico insisted that a cancellation of the trucking ban be written into the treaty. The U.S. reluctantly agreed and in 1994, when it came to operation, the the U.S. promised to phase out the ban.

Except that the very next year, 1995, the U.S. Congress passed another law extending the ban on Mexican trucks indefinitely.

Later that same year the Mexican government sued the U.S. under NAFTA’s Chapter 20 party-to-party dispute resolution mechanism. They won the dispute, but the U.S. politely did not comply.

In 2001, the NAFTA dispute tribunal unanimously found against the U.S. again saying that, the ban violated NAFTA’s provisions on national treatment and most favored nation obligations. The U.S. then lifted a ban a bit, but only on Mexican citizens owning American trucking companies, which did not really get at the heart of the dispute, because Mexican-owned companies were still not granted the necessary permits to operate in the U.S.

Following that, the Mexican trucking federation, CANACAR began what turned out to be years of negotiations with people in the Bush Administration to get them to obey the law. The administration argued that even if the federation could win over members of the Bush Whitehouse, Congress would never vote to obey the provisions of the treaty or the tribunal’s ruling. What they offered to do instead was to set up a pilot program in 2007 which would allow certain inscribed Mexican trucking companies to operate in the United States.

Yet even then, with a Democratic majority in both houses, the U.S. Congress refused to fund the project. And when President Obama’s budget was unveiled this year, money for the limited pilot project was not in it. In April, the trucking federation responded by once again filing Chapter 11 arbitration suit against the U.S., claiming this time that the U.S. was violating its NAFTA commitments by blocking the entry of Mexican trucks.

Although there are no damages demanded in the arbitration suit, as I noted above, the suit does mention that presently it costs the Mexican trucking companies over US $2 billion each year for the higher priced U.S. truckers and trucks. So, however it will be resolved (if ever) it will be worth a significant fortune to one side or the other of the border.

Obama Doesn’t Plan to Reopen Nafta Talks

After you have read about Obama backing away from his campaign pledge to revisit and re-vision NAFTA, click here and go to an earlier post about the upcoming United Church of Christ General Synod resolution encouraging him to not back away from his campaign pledge to revisit and re-vision NAFTA.
Stan


New York Times

April 21, 2009

By BRIAN KNOWLTON

WASHINGTON — The administration has no present plans to reopen negotiations on the North American Free Trade Agreement to add labor and environmental protections, as President Obama vowed to do during his campaign, the top trade official said on Monday.

“The president has said we will look at all of our options, but I think they can be addressed without having to reopen the agreement,” said the official, Ronald Kirk, the United States trade representative. It was perhaps the clearest indication yet of the administration’s thinking on whether to reopen the core agreement to add labor and environmental rules.

Mr. Kirk spoke in a conference call with reporters after returning from a regional summit meeting that Mr. Obama attended over the weekend in Trinidad. He said that Mr. Obama had conferred with the leaders of Mexico and Canada — the other parties to the trade agreement — and that “they are all of the mind we should look for opportunities to strengthen Nafta.”

But while he said that a formal review of the 1992 pact had yet to be completed, Mr. Kirk noted that both Mr. Obama and President Felipe Calderon of Mexico had said that “they don’t believe we have to reopen the agreement now.”

Mexico in particular, whose exports have exploded under Nafta, has little interest in such a renegotiation.

Not only Mr. Obama but also one of his rivals for the presidency, Hillary Rodham Clinton, had promised during their campaigns to renegotiate the accord — a politically popular position in some electorally important Midwestern states that have lost thousands of manufacturing jobs.

Thea Lee, the A.F.L.-C.I.O. policy director, said that the workers federation would have preferred “more definitive” language on addressing key labor concerns, but that it was understandable for a new administration to start its review with a less confrontational approach.

“We were obviously very encouraged by what Obama the candidate was saying on the campaign trail in terms of needing to recognize the deficiencies of Nafta and to strengthen it,” said Margrete Strand Rangnes, a labor and trade specialist with the Sierra Club.

Her group opposed Nafta from the start as lacking adequate environmental provisions, and contends that the side agreements added later have proved inadequate. “You have an environmental side agreement that doesn’t have as many teeth as the commercial provisions of the agreement,” she said. “You have an investment chapter that allows companies to basically file suit against common-sense environmental and public health measures.”

But she said the Sierra Club recognized that change would not come easily, and added, “We’re eager to work with the administration in having that conversation.”

Since the election, neither the president nor Mrs. Clinton, now secretary of state, has said much about trying to move side agreements on labor and the environment — which are subject to limited enforcement — into the main part of the trade pact, a potentially tangled and protracted process. As candidates in the Democratic presidential primaries last year, both said they would renegotiate or even opt out of Nafta, citing flaws in its labor and environmental provisions, while trading accusations over past support for the agreement.

Mr. Kirk, who as mayor of Dallas was known as a strong advocate of free trade, also said the administration planned expeditious reviews of pending trade agreements with Colombia and Panama.

He said that Colombia had made “remarkable progress” in reducing violence — attacks against labor activists have been a key sticking point — but that other issues remained, and he vowed intensive consultation with Congress on the matter.

The Bush administration signed the agreement with Colombia in November 2006. But Congressional Democrats and United States labor groups have said the Uribe government must do more to stop the antilabor violence and hold perpetrators accountable, a position Mr. Obama supported during his campaign.

Regarding Panama, Mr. Kirk said that differences on labor standards, and the question of the country “possibly being a tax haven,” needed resolution.

Mr. Obama and Mr. Kirk met with leaders of both countries during the Trinidad meeting.