Los Angeles Times
Americans have especially benefited form NAFTA
By Robert B.
It should be no surprise that the opponents of openness have targeted the North
American Free Trade Agreement, which seven years ago created the largest
free-trade area in the world. What is a surprise is that the proponents of an
internationally engaged United States have so often abandoned the debate to the
economic isolationists and the purveyors of fright and retreat.
The American people must know the truth about the benefits of trade and
openness before we attempt to launch a new global round of trade negotiations
this November. They must also know the truth if we are going to extend free
trade to all the Americas and persuade Congress to give President Bush the trade
negotiating authority granted to the previous five presidents. And in telling
the truth, we must dispel the many myths about NAFTA.
NAFTA offers the high ground on which to plant the standards of free
trade, democracy and support for developing nations. Consider three questions:
Has NAFTA served the American public? As a test case over a 2,000-mile border of
free trade between developed and developing countries, is NAFTA a model for the
future? What has NAFTA accomplished for the people of Mexico?
On the question of U.S. interests, NAFTA and the removal of global
trade barriers through global trade negotiations have resulted in higher incomes
and lower prices for goods, with annual benefits amounting to $1,300 to $2,000
for a family of four. The biggest beneficiaries are lower-income Americans who
bear a disproportionate burden when goods are priced artificially high because
of trade barriers. It is no coincidence that the longest period of economic
growth in U.S. history came in the aftermath of NAFTA. Ross Perot claimed that
NAFTA would lead to "a great sucking sound" that would swallow U.S. jobs. He was
right about a great sucking sound, but wrong about the effect: U.S. exports to
Mexico and Canada have boomed under NAFTA and now support 2.9 million American
jobs--900,000 more than in 1993. Such jobs pay 13% to 18% more than the average
U.S. exports to our NAFTA partners
increased 104% between 1993 and 2000; U.S. exports to the rest of the world grew
half as fast. Today, our trade with Mexico is nearly half a million dollars a
minute, and we export more to Mexico than to the combination of the four
European members of the G-7: Britain, France, Germany and Italy.
As a model for north-south relations, NAFTA represents a commitment by
Mexico to modernize--politically and economically--and a commitment by the U.S.
and Canada to support this great change so we can realize the full potential of
a new, larger North America. NAFTA was a key to the political transformation of
a modernizing Mexico. Last year, in the freest and most open presidential
election in the country's history, Mexico elected a new president, Vicente Fox,
from an opposition party for the first time since that nation's revolution.
NAFTA's opponents outside Mexico often claim they are
defending the Mexican people against an agreement that has led to exploitation.
But when Mexicans had the opportunity to speak for themselves, 80% voted for
major-party candidates who endorsed North American free trade.
NAFTA has fueled Mexico's economic growth; more than half of the 3.5
million jobs created in Mexico since 1995 are connected to trade. NAFTA has also
promoted cooperation between the U.S. and Mexico. Today, we are working together
on issues from the environment and drugs to law enforcement and immigration.
Earlier this year, as California faced an energy crisis, the Mexican state of
Baja California stepped in to sell the San Diego area enough electricity to
power 50,000 homes.
NAFTA also helped Mexico's
resilience amid the challenges of globalization. Following the 1982 peso crisis,
it took Mexico seven years to be able to borrow again in international financial
markets; after the financial shock of 1994-95, with the help of NAFTA, it took
just seven months. Following the 1982 crisis, it took seven years for U.S.
exports to Mexico to reach their crisis levels; after the 1994-95 downturn, it
took just 17 months.
NAFTA illustrates one of the
fundamental truths about trade: It is not a "you win, we lose" proposition. By
generating growth, trade multiplies the purchasing power of our trading
partners, which in turn benefits our businesses, farmers, workers and
We should strive for more NAFTAs to help
build a world that trades in freedom-opening new markets for producers, new
choices for consumers and new avenues for political and economic cooperation
between governments. In the 21st century, strong countries will benefit from
free trade and prosperous, democratic, peaceful neighbors that can help create
regions of vitality and shared values.