Southland business people remain split over NAFTA.

As pact nears enactment, they are still divided over impact

Nafta proponents in the Southland, not surprisingly, hailed the treaty's victory in the U.S. House of Representatives last week as a boon to the region's export community, while opponents still maintained Southland workers and economy will suffer from its effects.

If the North America Free Trade Agreement passes the U.S. Senate and is signed by President Clinton, half the American products now moving into Mexico would cross duty-free as of Jan. 1, said Leslie Browne-Cazas, tax partner in charge of international trade at the downtown Los Angeles office of accounting firm Arthur Andersen & Co.

The absence of tariffs would make U.S. products more competitive with those being sold to Mexico by the Europeans and Asians, she explained.

The passage of Nafta "provides us with numerous opportunities to expand businesses and our job base," said Jay Winter, executive secretary of the Foreign Trade Association of Southern California, representing a cross-section of manufacturers, importers, exporters and others involved in international trade.

But David Sickler, director of the western region of the AFL-CIO, said he is concerned Southlanders would lose their jobs under Nafta. If companies find cheaper labor south of the border, that's where they will go, he said.

Passage of Nafta would "have a horrible impact on Los Angeles as a city and California as a state" because many companies would abandon the U.S. in search of greater profits in Mexico, said Luisa Gratz, president of Local 26 of the International Longshoremens and Warehousemens Union, which represents Southland manufacturing and processing laborers.

"It's going to be devastating for our industry," said Cristina Vazquez, political and education director for the western region of the International Ladies Garment Workers Union. "Even though there are a lot of garment shops in Mexico, Nafta will provide greater incentive for our industry to leave."

Because of potential job losses and the expected increase in investment in Mexico, California's standard of living and its tax base could be lowered, added AFL-CIO regional representative Victor Munoz.

Until recently, foreign investors were barred from owning more than 50 percent of a company in Mexico. But under Nafta this rule would be considered a barrier to trade, so the Mexican government abolished it in negotiations a year ago. Thus American investment in Mexico would now be encouraged, Munoz said.

The trade pact also will bring a large influx of illegal Mexican immigrants to the Southland, Munoz said.

Until about a year ago, Mexico subsidized its farmers. But now the U.S. will be allowed to challenge these subsidies as barriers to trade.

Under, the trade deal, an abundance of inexpensive corn, a Mexican staple, would flow over the border. Mexican farmers, no longer subsidized by their government, won't be able to make a living and would flock to the United States, Munoz said.

On the plus side, Susan Kohn Ross, an international trade attorney in Los Angeles, said small and medium-sized companies in Southern California would be among those most helped by the new trade pact. Most large corporations have already relocated or formed joint ventures to penetrate the Mexican economy, she explained.

Smaller companies would be helped by new standards on pesticides and chemicals, for example, Ross said.

Mexico currently sets arbitrarily high standards on the amount and kinds of chemicals and pesticides it accepts in food it imports. The trade deal will enable smaller U.S. companies to take advantage of new, lower and more scientifically based standards for food products, and thus would be able to export more, Ross said.