NAFTA: a Bargain For US and Mexico
WHAT nobody talks about regarding the North American Free Trade Agreement (NAFTA) is the disaster it would cause for United States workers if it fails to be ratified. Without it, there will be no big pressure on Mexican entrepreneurs to quickly raise workers' salaries. The disparity between US and Mexican wages will remain great, and there will be a continuing tendency for US manufacturers to move production south of the border.
The Mexican government will, in its own national interest, do everything in its power to lure whatever business it can. It will continue to improve the education of its workers so that they will be competitive with those in the US. It will reduce bureaucratic impediments to make it easier for foreign business people to operate in Mexico.
Pressure from within is rapidly forcing political democratization in Mexico, and even without the restraints of NAFTA, Mexico is likely to take many manufacturing jobs from the US. On the other hand, NAFTA opponents don't understand that the trade agreement would bring new rules on environmental and working conditions. Without these new rules, when it comes to enticing industry, it would not be possible to maintain the advantages of low wages, high environmental standards, and antitrust norms. But if the US rejects NAFTA, it will be alienating a country that can play hardball against its economy.
The present opponents of NAFTA are surely aware that on the Texas side of the Rio Grande, average wages are 7 times what they are in Mexico. Without NAFTA and its rules for fair business practices, both the Mexican government and its business leaders are likely to use every means at their disposal to lure business from the US. And who could stop them?
With NAFTA, however, there will be pressure from both sides of the border for a better Mexican standard of living: from the US to increase potential markets for its goods and services, and from Mexican workers to get a fair share of the larger pie they will help create.
Realistically, it is very much in the interest of US workers to have Mexican wages rise. When more Mexicans have more disposable income, US workers will have steady work supplying them with goods and services - but only if there is a free trade agreement that will insure that Mexican wages will rise and that US exports will be able to enter Mexico without tariff restraints.
Also, with NAFTA there will be pressure on Mexican businesses to respect rules regarding unfair business practices, so that US companies will have a more even playing field in both national and international competition.
One of the major advantages of NAFTA for the US will be its effect on illegal immigration from Mexico. With an improved Mexican economy and better wages, Mexican workers would simply stay at home where they can enjoy their families, their culture, and speak their own language. Poverty forces them to cross the US border illegally. If it is true that ``illegals'' take jobs away from American workers, then it is very much in the interest of US workers to see NAFTA ratified.
The advantages to the US are enormous. Just imagine the gold mine for the US tourism industry. Right now, it's pretty much a one-way street, with only the few very wealthy Mexicans going to Las Vegas, Nev., Houston, or New York. That unfavorable balance (to the US) would soon change if Mexicans had the funds to travel.
The short, medium, and long-term effects of ratifying NAFTA would be overwhelmingly positive for the US.