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Who Wins on Latin Trade?

Net benefits for United Statesians include more export jobs, lower inflation, less immigration pressure.

April 21, 1998



Latin Americans buy about one-third of all the goods and services the US exports.

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Mexico recently passed Japan to become the second largest US export market.

Venezuela and Mexico supply the US nearly three-quarters as much crude oil as do all the Persian Gulf exporters, thus making the US less dependent on Mideast oil.

Considering how much US trade flows to and from Europe, Canada, and Asia, those are remarkable statistics for a region most United Statesians often forget about.

Why, then, is the vast, hemisphere-wide free-trade area pledged last weekend by 34 leaders of North, Central, and South America needed? Sounds as if trade is going well already. And doesn't the other end of that trade - what US consumers buy from Latin America - mean lost US jobs? If your car's seats and transmission are made south of the border, aren't Michiganders getting pink slips?

Valid questions. But they are effectively answered by the net benefits of expanded trade. For Americans (United Statesians) those benefits include: lower cost goods, lower inflation, more jobs in export industries, less immigration pressure, greater variety of goods and foods in all seasons, and a potential squeeze on drug lords' recruiting among jobless Latins.

It now remains to be seen how effectively rhetoric translates into reality. President Clinton told his fellow leaders they had journeyed "from words to deeds" since their 1994 summit of the Americas in Miami. Unfortunately the US president himself had journeyed from triumph to uncertainty on trade between his 1993 win on the NAFTA free-trade zone (with Mexico and Canada) and his failure last fall to convince his own party leaders to support him on trade dealing at the Santiago summit.

The schedule announced there calls for a Sept. 30 start on detailed negotiations in Miami. That means Clinton will have to seek "fast track" trade power from Congress again sometime after November's election. Should that election increase the number of anti-trade Gephardt Democrats, he may find it hard to persuade even pro-trade Republicans and centrist New Democrats to stick their necks out. Perhaps the two parties' attempts to woo Hispanic voters will change the equation by then.

But ethnic politics are a timorous reason to support the lowering of trade barriers. The thinking legislator's reason should be that expanded trade eventually helps a majority of people in the US and other nations.

The great surge in global trade in the half century since World War II has expanded both the riches and the richness of life for hundreds of millions of ordinary people.