Give NAFTA Its Due

Americans have taken little note of the free-trade negotiations with Mexico; that's puzzling, given what the US stands to gain from the pact

NOTWITHSTANDING the flurry of articles and op-ed pieces in the mainstream press during last spring's fast-track debate, most United States media organizations have dropped the ball on reporting progress in the North American Free Trade Agreement (NAFTA) talks. Tracking NAFTA negotiations via the United States media is practically impossible; even such respected publications as the Wall Street Journal, the New York Times, and the Washington Post have failed to report on all but the most salient aspects of

the proposed accords.

Not that the negotiation progress has been slow. In a remarkably short period, NAFTA negotiators from Canada, Mexico, and the US have managed to hammer out agreements on all but a handful of issues.

Moreover, Mexico's chief negotiator, Herminio Blanco Mendoza, seems willing to bend on the two most politically sensitive sectors for the Mexicans: agriculture and energy. The US team, led by Trade Representative Carla Hills, similarly has expressed a willingness to compromise on financial services and textiles. For its part, Canada is likely to go along with any agreement that will open market access to Mexico's 84 million potential consumers, as long as it doesn't compromise the existing US-Canada free -trade accords. A draft text for NAFTA, once thought not possible before the end of the year, is now expected to be completed within a few weeks.

Unlike their US counterparts, Mexican journalists have been diligent in their reporting of the NAFTA negotiations and related issues. Almost daily NAFTA headlines crowd the front pages of Mexico City's most prestigious dailies. Television newscasters track the agreement's blow-by-blow progress as though they were reporting from the front lines of a war.

One way to account for the disparity in US and Mexican coverage of the NAFTA negotiations is the persistent Eurocentric attitude that has long prevailed in US economic relations and the consequent East/West focus of most news organizations.

A second, less obvious reason, is the general misconception in many newsrooms regarding the relative importance of NAFTA to the economies of the three countries involved in the talks. The media consensus is that Mexico will be the chief beneficiary of any continent-wide trade agreement, followed by Canada, with the US a distant third. Supporting this belief is that fact that Mexico accounts for just 7 percent of total US trade, while the US accounts for 70 percent of all Mexican imports and exports.

BUT the raw trade figures tell a half-truth at best. Even at only 7 percent, Mexico is still the US's third most important trading partner, after Canada and Japan. Bilateral trade between the two countries (including services) amounted to nearly $76 billion in 1991. That trade increased an average of 18 percent a year over the last four years, and created an estimated 300,000 jobs north of the border. In 1991, the US enjoyed a $2.1 billion trade surplus with Mexico, and on a per capita basis, Mexicans no w import nearly $300 in US goods and services each year, compared to $266 for the European Community.

As the US languishes in the economic doldrums, the Mexican economy is bubbling along at a respectable clip. Real growth is likely to top 4 percent in 1992, while inflation will probably drop into single digits by the end of the year. With dollar reserves already swollen to $21.3 billion at end-1991, this year's fiscal surplus is expected to be a healthy 3.2 percent of gross domestic product. Direct foreign investment is also accumulating at the astounding rate of nearly 18 percent per year.

The point is that the US stands to gain as much from NAFTA as its neighbors do. Mexico's strong economic showing of the past few years has led to a sharp rise in consumer demand, far outstripping the supply capabilities of local producers. US agricultural exports to Mexico could jump as much as 30 percent in the one to two years after the agreement takes effect, while exports of consumer products and services should also post impressive gains. What's more, the additional investments in Mexico resulting f rom NAFTA will boost employment and push wage levels higher, creating greater economic opportunity at home for Mexican workers and indirectly discouraging them from making the arduous journey north in search of work.

For Mexico, though, NAFTA is not nearly the make-or-break agreement it seemed to be two years ago. Today, most Mexican politicians reject the protectionist policies of the past and instead embrace the notion of free-markets and liberal trade regimes. Though the government line remains extremely pro-NAFTA, the comprehensive restructuring of the Mexican economy - begun in 1985 under former President Miguel de la Madrid and aggressively pursued by current President Carlos Salinas de Gortari - will continue with or without the agreement. Mexico clearly has set a new economic course from which there is no turning back.

For the US, NAFTA could mark the beginning of a new economic course of its own, shifting our traditional East/West focus toward a more regional view. A successful agreement with Mexico will help redefine the US's role in the Americas, opening the possibility for the eventual creation of a Western Hemisphere Economic Community, with more than 700 million consumers.

Though NAFTA is not yet a done deal, the insider consensus in all three countries is that it will be soon. The agreement will have political and economic ramifications for all North Americans well into the future. It is in the US's best interest to move NAFTA into the forefront of our national debate. If the politicians won't do so, the press should.

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