Under NAFTA, Pigs Are Big on Border
Texas leads border states in free-trade boom, but 1994 pact is a mixed blessing for region
PERRYTON, TEXAS — It used to be that cattle pens, grain elevators, and endless fields of wheat were the only things visible from the roads outside this small town in the Texas panhandle.
These days, dozens of shiny new hog barns lie along almost every road leading out of town. They're houses for Texas' newest bumper crop - hogs. And they're here for one major reason: NAFTA.
The North American Free Trade Agreement (NAFTA) has thrust Perryton, and other towns like it in the Southwest, into the global marketplace. With the market for American pork growing, more and more of the long, low-slung barns have become a part of the landscape here. Elsewhere along the border, auto-parts factories are sprouting like sagebrush. Three years after NAFTA began, these industries are symbols of the new prosperity - and unexpected problems - that are reshaping the region.
Since 1994, the numbers have been impressive: Unemployment has gone down in all four states that border Mexico, and exports have gone up dramatically in three. And while some economists say other factors, such as the devaluation of the peso, have played a larger role in trade relations with Mexico, many others say NAFTA's impact on the border states has been significant.
"Agricultural exports have been a big winner along with the automobile and auto-parts industry," says Les Glick, author of "Understanding the North American Free Trade Agreement." Agricultural exports to Canada and Mexico were worth $11.6 billion last year. American beef, for example - much of which is produced in Texas - is finding a ready market in Mexico. Indeed, the US Department of Agriculture (USDA) says beef exports to Mexico rose 81 percent during the first six months of this year.
Plus, NAFTA has allowed American auto-makers to fully integrate their Mexican factories - which produce things like engines and wiper blades - with assembly plants in the US and Canada, Mr. Glick says.
And, of course, pork has been a great success. Since NAFTA went into effect, Canadian consumption of American pork has doubled, according to the USDA. Exports to Mexico during the first six months of 1997 are up 36 percent and climbing.
"There's a great opportunity, no question about it," says Ken Horton of Texas Pork Producers.
But not all industries share his enthusiasm. The domestic apparel business has gone into a tailspin as production moves to Mexico. About 6,000 apparel jobs were lost in El Paso, Texas, alone in 1994, says Martha Sanchez, with the AFL-CIO. "NAFTA hasn't been good to us."
And some Perryton residents see a problem of their own. About 1,000 pigs live in each new barn outside town, and the stench of hog manure can sometimes be an overwhelming - and unwelcome - reminder that NAFTA has altered the community.
Other critics also contend that NAFTA has only added to a key problem in the West: growth.
"We not only haven't caught up with the growth from years past, now we have new growth," says Cyrus Reed, a border analyst for the Texas Center for Policy Studies in Austin. He says this growth has exacerbated problems in solid-waste disposal and water treatment, problems he believes "are getting worse before they are getting better."
From the states
The four border states have experienced varying degrees of prosperity since NAFTA began:
* New Mexico. State businesses are supportive of the agreement, but they've failed to capitalize on its potential because the state doesn't have a major point of entry, such as a port, rail line, or interstate highway, says Dante DiGregorio, a partner in Global Perspectives Integrated, a consulting firm in Albuquerque.
* Arizona. The area around Tucson has "more warehousing, more trucking, more services in the import and export sector," says David Gantz, who teaches international law at the University of Arizona. But he says that success has been tempered by the decline of retail merchants along the border who have been "decimated" by the peso's devaluation.
* California. NAFTA has meant a surge in employment and electronics production. Demand for workers has increased dramatically in San Diego, where several new electronics factories are producing parts that are then shipped to Tijuana for assembly.
Since 1993, the San Diego unemployment rate has fallen from 8.7 to 4.4 percent. "If NAFTA created tremendous job losses, there's no evidence of it [here]," says Ernesto Grijalva, vice president for public policy at the San Diego Chamber of Commerce.
* Texas. The Lone Star State has received the biggest boost. Laredo is the biggest land port of entry in the US, and Interstate 35 carries about two-thirds of the goods shipped from Mexico to the US and Canada.
Perhaps most important to the Texas-Mexico trade, however, is Texas's political climate. While California's positions on immigration have "not played very well" in Mexico, the positions taken by Texas Gov. George W. Bush are popular, says Jorge Gonzales, an economics professor at Trinity University in San Antonio. "When Mexicans have a choice to do business, Texas is seen as a much friendlier place."