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 WASHINGTON, Oct. 1 /PRNewswire/ -- The following is a statement in support of the North American Free Trade Agreement (NAFTA) by Andrew H. Card, president and CEO of American Automobile Manufacturers Association (AAMA), representing Chrysler Corporation (NYSE: C), Ford Motor Company (NYSE: F) and General Motors Corp. (NYSE: GM):
 False and baseless charges are being aired by many opponents of NAFTA relating to jobs and production by America's car companies and their suppliers.
 Chrysler, Ford and General Motors, their supplier companies and the 1.5 million Americans they employ in more than 4,400 manufacturing facilities across the United States have a tremendous opportunity with NAFTA. As the largest manufacturing employer and the No. 1 customer of small business in this country, our industry has a vital interest in placing Mexico-U.S. trade on a level playing field for the first time. NAFTA does just that.
 I want to set the record straight: NAFTA will create jobs for the auto industry in the United States. NAFTA will allow us to export more cars, trucks, minivans and sports utility vehicles to Mexico, one of the fastest growing automobile markets in the world. And NAFTA can only help the Mexican auto market grow at an even faster rate.
 I also would like to address some of the charges that Ross Perot has made in his recently published book on NAFTA. Mr. Perot charges, among other things, that America's car companies will simply pick up and move operations to Mexico if NAFTA is approved. This is simply not true.
 NAFTA will not shift production and jobs from the U.S. to lower-wage Mexico. According to the Congressional Office of Technology Assessment, today there is a $410 cost disadvantage of building a car in Mexico and bringing it to the United States because Mexico's lower wages are more than offset by higher transportation costs and lower productivity. NAFTA will not change this cost advantage of producing cars in the United States. Mr. Perot chose to ignore these facts.
 When NAFTA is enacted, the advantage of producing cars here and shipping them to Mexico will increase, as will U.S. jobs. The current restrictions against imports make it impossible to serve the growing needs of the Mexican market through U.S. exports. Current Mexican law requires American car companies to invest heavily in Mexican facilities to sell cars there. NAFTA will abolish these restrictions and let us export more cars to Mexico.
 Had Mr. Perot analyzed the situation accurately and objectively, he would have found that NAFTA will provide tens of thousands of new orders for vehicles produced in America's auto plants which translates into more secure jobs for American workers. Regrettably, he chose to ignore the facts.
 The benefits of NAFTA for our companies and our employees can be summarized as follows:
 -- NAFTA steadily eliminates Mexico's high tariffs and requirements
 for Mexican content. Today, these restrictions severely limit
 the export of U.S. automobiles and automobile parts to Mexico and
 boost Mexico's exports to the U.S. NAFTA will place U.S.-Mexico
 automotive trade on a level playing field -- preserving American
 jobs and providing greater opportunities for American exports.
 -- NAFTA will greatly increase the number of U.S. jobs supporting
 the Mexican market. The Commerce Department estimates NAFTA will
 mean $1 billion in potential new sales for America's major auto
 producers in the first year of the agreement. Today, the
 production and sale of Chrysler, Ford and General Motors vehicles
 in Mexico supports approximately 45,000 U.S. jobs. Very few of
 these jobs are supported by vehicle exports to Mexico. In the
 first year of NAFTA, U.S. auto exports to Mexico should increase
 from the current level of about 7,700 vehicles to 60,000
 vehicles. That increased export production volume supports
 15,000 incremental jobs in the U.S. auto and supplier industries
 in the first year alone.
 -- NAFTA will allow the American auto companies and auto parts
 companies to better serve this fast growing market with more U.S.
 exports to Mexico. Mexico's auto market is projected to grow
 between 6 and 7 percent annually, if NAFTA is implemented,
 compared to an annual growth rate of only 1 percent in the U.S.
 and Canada. In fact, Mexico will pass Canada as the second
 largest market in North America within 10 years.
 -- NAFTA's rules of origin and strict limits on duty-free access to
 North American markets will make it extremely difficult for
 European and Japanese companies to establish operations in Mexico
 solely to export vehicles and components to the United States.
 NAFTA is good for our industry and America. We have carefully analyzed Mr. Perot's anti-NAFTA book and challenge his charges.
 AAMA Responds to Ross Perot's Charges
 Mr. Perot: "Northern Mexico will replace Detroit as the car
 production center of North America."
 FACT: If the American car companies planned to pick up and move the industry to Mexico, they would go today. NAFTA will not change this fact. The fact is that the vast majority of the three companies' North American production and employment facilities are located in the United States because American workers, production facilities and networks are more efficient. That is why the number of Americans employed in the U.S. auto companies is expected to increase, not decrease, as a result of NAFTA. Simply stated, we will be able to export more U.S.-built vehicles to Mexico.
 AAMA's member companies' joint production in Mexico last year was 692,000 units, out of their total worldwide production of 15.1 million and North American production of 10.3 million units. Mexico is a small part of the companies' overall production and that ratio will not vary much in the foreseeable future.
 Chrysler, Ford and General Motors together employ more than 731,000 American men and women in their U.S. operations. Another 900,000 Americans are employed by companies supplying materials and parts to the three U.S. auto manufacturers. The proof of their commitment to keep auto production and jobs in the U.S. is substantiated by their overwhelming investment and capital spending for future plans in the U.S. and in contractual relationships with their U.S. work force.
 Mr. Perot: "The bottom line is NAFTA will allow U.S. automakers to
 replace American workers with low-wage Mexican workers."
 FACT: The claims by opponents of NAFTA that low-wage rates make auto production in Mexico less expensive are completely false. Congress' own Office of Technology Assessment investigated this claim and reported in August that, comparing the costs of building a car in the U.S. and building the same car in Mexico and bringing it to the U.S., the Mexican-built car costs $410 more. That's because labor is only a small part of the total cost of building a car.
 America's automakers build cars in Mexico because under current Mexican government rules, with few exceptions, cars and trucks sold in Mexico have to be built in Mexico. As a result of these rules, the three U.S. companies were together only allowed to export 4,000 U.S.-built cars and trucks to Mexico last year. NAFTA immediately stops this one-sided auto trade. It means that American auto plants can ship tens of thousands of cars and trucks to sell in Mexico -- one of the world's fastest growing automobile markets.
 Mr. Perot: "NAFTA makes Mexico a very attractive manufacturing
 center for U.S., Japanese and European manufacturers."
 FACT: U.S. auto companies have built plants in Mexico for two major reasons:
 1. Mexico's government-mandated Auto Decrees have required automakers to build plants in Mexico in order to sell in that market. These Decrees have placed strict conditions on automotive investment and production in Mexico and prevented U.S. exports to Mexico. NAFTA offers the chance to open the artificially protected Mexican market and, for the first time, offer a full range of U.S.-built cars and trucks.
 2. Like Canada, Mexico is a logical market for U.S. cars and trucks. Mexico is the United States' third largest trading partner. Just for perspective, the U.S. maintains a $5 billion trade SURPLUS with Mexico, compared with a $50 billion trade DEFICIT with Japan. It is also the fastest growing market in North America. NAFTA offers the chance to lock in U.S. access to a potentially huge market -- and one that happens to be on our doorstep. By the year 2000, the Mexican auto market will equal that of Canada.
 The record over the past 10 years demonstrates vividly that when the Japanese auto industry expanded its production base from Asia to North America, the United States was the clearly preferred site. More recently, when BMW and Mercedes both announced plans earlier this year to build their first automotive plants ever operated outside of Germany, it was the United States that was selected as the site for production, not Mexico or Asia.
 Further, NAFTA's rule of origin requirement that 62.5 percent of the parts used in a vehicle be sourced in North America will prevent non- North American companies from taking advantage of the agreement to use Mexico as a back door from screwdriver plants in Mexico to the U.S.
 Mr. Perot: "Mexico provides automakers an easy escape hatch from
 the high costs of operating in the United States and
 they are taking advantage of it. This is one of the
 reasons why dozens of U.S. auto factories are closing
 and thousands of American auto manufacturing and
 secondary jobs are disappearing."
 FACT: It is simply untrue that U.S. automakers are "escaping" the U.S. to "take advantage" of producing in Mexico. In 1992, AAMA's three member companies operated six assembly plants which produced 692,000 vehicles in Mexico out of their total worldwide production of 15.1 million units and North American production of 10.3 million. Mexico is a small part of the companies' overall production and that ratio is not expected to change significantly over the next decade.
 NAFTA's dismantlement of the government's restrictive Auto Decree will allow companies to shift Mexican production of some models to the U.S. and vice versa to eliminate duplication and to integrate Mexican operations into the U.S.-Canada production base. But AAMA's members' business plans call for stable levels in Mexico's share of total North American production.
 NAFTA offers us a chance to create a North American economic and trade partnership, similar to those being created by our competitors in Europe and Asia to strengthen our competitive position well into the next century.
 Mr. Perot: "Mexico's domestic content restrictions should have been
 eliminated during the NAFTA negotiations. Instead, U.S.
 negotiators agreed that Mexico could continue to apply
 these unfair restrictions slightly modified, for another
 10 years."
 FACT: Without NAFTA, Mexico could maintain its trade-distorting and highly restrictive Auto Decree indefinitely. The fact is that AAMA members have operated in Mexico for 50 years and have had to make extensive business investments based on these non-free market rules. NAFTA phases out all of the restrictions in Mexico's Auto Decree over a 10-yar period. If the U.S. had insisted on wiping the slate clean immediately and eliminating all of these restrictions, the biggest winner would be new entrants from Europe or Asia who could immediately enter the open market and severely damage the competitive position of the companies which have struggled to operate in Mexico for decades under the major restrictions of the Auto Decree. This is why the slate can't be wiped clean immediately.
 Mr. Perot: "Under NAFTA, the United States must eliminate all of
 its tariffs on automobiles imported from Mexico, while
 Mexico only has to reduce tariffs on autos made in the
 United States over a 10-year period."
 FACT: The Mexican tariff on imported cars is 20 percent today and that tariff was applied to the roughly 4,000 autos which last year we were allowed to export from the U.S. to Mexico because of the country's restrictive trade rules. The U.S. places no non-tariff restrictions on auto imports from Mexico and the U.S. tariff on autos is only 2.5 percent. NAFTA will immediately and dramatically change this lopsided situation. Under NAFTA, Mexico's tariff on autos is cut in half immediately and then phased down over 10 years. The Mexican and U.S. truck tariffs are also immediately cut in half and eliminated in five years.
 -0- 10/1/93
 /CONTACT: Jason Vines of the American Automobile Manufacturers Association, 202-775-2738/
 (C F GM)

CO: American Automobile Manufacturers Association ST: District of Columbia, Michigan IN: AUT SU:

JG-SM -- DE009 -- 7815 10/01/93 13:04 EDT
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Date:Oct 1, 1993

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