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Players disagree on how free trade will be played out on U.S., Mexico soil.

CUERNAVACA, Mexico -- The North American Free Trade Agreement signed last year by President Bush, Canadian President Brian Mulroney and Mexican President Salinas is a 15-year program to eliminate trade and investment barriers (65 percent of which will disappear in the first five years) between all three countries. It will create the world's largest free-trade zone: 365 million people.

NAFTA is unequal in that Mexico is a minor player -- its Gross Domestic Product is only 4 percent of the United States' and 24 percent of Canada's.

Polls show the majority of Canadians oppose NAFTA. U.S. opponents, meanwhile, anticipate accelerated job loss to Mexico's U.S.-owned maquiladora manufacturing and assembly plants.

Endorsing NAFTA are groups that promote business, such as the U.S. Chamber of Commerce and the Conference Board, which downplays the job-loss estimates and states: "The forces driving NAFTA and other trade blocs will not go away. Business inter-relationships in North America are going on, NAFTA or not. For the U.S., NAFTA is the gateway to expanded Latin American markets."

The Chamber of Commerce argues that "by reducing Mexican tariffs, NAFTA will improve the ability of U.S.-based firms too export U.S.-made products to Mexico." It gives as examples telecommunications, computers, pollution-control equipment, construction machinery and machine tools.

Groups opposed to NAFTA, such as some members of Congress and the AFL-CIO, are concerned about jobs in the United States and working conditions in Mexico. The Sierra Club, which is at the forefront of those worried about the environmental effects of NAFTA, wants a NAFTA environmental impact statement before the treaty is ratified.

Mexico's Salinas is lobbying hard for NAFTA, staking his own reputation and Mexico's future on it. His nation will spend as much as $50 million this year in Washington, lobbying Congress. Pro-NAFTA U.S. corporations are spending, in total, similar amounts on lobbying because Congress itself is not united behind NAFTA.

What worries many Americans is NAFTA's potential to depress U.S. wages and eliminate jobs. The average Mexican worker makes about $4 a day (the minimum wage), though inflation has relentlessly lowered purchasing power over the last decade.

Insiders maintain that Mexico-astrader stands to gain the most from NAFTA -- guaranteed access to U.S. markets -- which dismays such U.S. industries as wine, sugar and wheat, footwear, apparel and textiles. They say the chief U.S. beneficiaries will be banks, insurance companies and giant agribusinesses, especially grains. Parts of the Mexican economy will suffer, they say, particularly livestock, lumber, steel and pharmaceutical sectors.

One major warning comes from the Inter-Hemispheric Education Resource Center in Albuquerque, N.M. It says NAFTA will dislocate much of the Mexican rural population as Mexico's "wheat, sorghum-and corn-growers are wiped out." That means there is "great potential for rural unrest."
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Title Annotation:North American Free Trade Agreement
Author:Jones, Arthur
Publication:National Catholic Reporter
Article Type:Cover Story
Date:Apr 16, 1993
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