U.S. opposition to free-trade agreement overshadows Bush's Mexico trip

November 26, 1990|By John M. McClintock | John M. McClintock,Mexico City Bureau of The Sun

MONTERREY, Mexico -- President Bush begins a two-day visit with Mexican President Carlos Salinas de Gortari today, but the symbol of their warm relationship -- a proposed free-trade agreement -- is facing increasing American criticism and may even fail if the United States heads into a recession.

The agreement is aimed at removing all trade barriers between the two countries. But critics say it would lead to the loss of thousands of American jobs as U.S. manufacturers head south of the border, where wages are one-eighth of what they are in the United States.

Especially hard hit would be the electronics, automobile, steel and textile industries, they say. Unions and various trade groups are beginning to mount campaigns to kill the proposal.

"Right now there is a kind of euphoria over the idea, but I think that once Congress sees its full implications, they will vote against it," said Mark Anderson, chief international economist for the AFL-CIO.

The AFL-CIO is mounting a campaign to kill the measure next spring when President Bush must seek congressional authority to negotiate a free-trade agreement with Mexico.

A similar agreement between the United States and Canada went into effect two years ago.

Either chamber can veto the measure through a simple resolution. But the strongest attack is expected to come in the House, where members are more sensitive to pressures from constituents.

Congress recently has shown an increasingly protectionist mood. The House gave final approval in September to a bill to sharply limit textile imports. The bill was vetoed by President Bush.

"There has always been protectionist sentiment in our history, but I think the Mexico FTA offers a unique opportunity for men of vision who see mutual benefit in free trade for both countries," said a senior U.S. trade official. "All the trade issues are on the table, so it is a little premature to say what the final agreement will be."

The U.S. official said he expects American and Mexican negotiators to come up with an agreement within nine months, allowing for final congressional approval in 1992.

A draft "Dear President Bush" letter is being circulated in Congress, citing a number of concerns about Mexico that have been ruled out as part of the trade talks and asks that a "social charter" be adopted.

The letter raises questions about Mexico's "authoritarian, undemocratic, one-party system," its "very weak" environmental standards, its control of organized labor, the continuing rise in Mexican illegal immigrants and its role as "one of the largest suppliers of narcotics."

The letter was prepared by Representatives Don J. Pease, D-Ohio, and Terry L. Bruce, D-Ill., two labor-backed congressmen.

Key congressional aides involved in international trade legislation foresee few problems with a Mexico treaty, but most say they are awaiting studies that show what the impact will be.

"Unlike the Canadian agreement, I think Americans will pay more attention to the Mexico FTA because the two countries are so vastly different," said Michael Aho, director of economic studies for the Council of Foreign Relations. "While it is true there may be some job losses, we can also foresee that American consumers will benefit from lower-cost Mexican goods and in increased sales to Mexico."

But Ron Blackwell, an economist for the Amalgamated Clothing and Textile Workers, said, "A U.S.-Mexico free-trade agreement would make vulnerable the jobs of well over a million American textile workers."

In the automobile sector, Mexican production workers are paid about $2 an hour in wages and fringe benefits, while their American counterparts get about $20, said Steven Beckman, chief economist for the United Auto Workers.

"It doesn't take a genius to see what effects this could have in the American auto industry. The manufacturers could simply bargain us against the threat of Mexico, leading to job losses and lower wage rates," said Mr. Beckman.

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