Free Trade with Mexico

April 22, 1991

The administration's bid for creditable authority to negotiate a free trade agreement with Mexico could be the most crucial long-range foreign policy issue on the 1991 congressional agenda. Yet with a June 1 deadline approaching for showdown votes on Capitol Hill, the White House has been losing ground in a running debate with environmentalists, unions and other special-interest groups.

What gives free trade foes an edge is the grain of truth found in their scare stories. The ecology-minded fear an industrial boom just south of Mexico's northern border that will increase already serious pollution problems. Labor bosses fear the loss of American jobs to factories in Mexico paying seven times less than comparable U.S.-based jobs.

There are powerful answers to these powerful arguments, and they need to be driven home in a hurry. A poor Mexico is a dirty Mexico. A poor Mexico is a low-wage Mexico. Unless our neighbor to the south can prosper, it will never have the resources to clean up its environment, improve its living standards and stop being a perennial source of massive illegal migration.

The AFL-CIO likes to talk about workers making only 60 cents to $2 an hour in the maquiladora industries that U.S., Japanese and European companies have set up just south of the border. What it does not like to talk about is the differential between the wages of maquiladora workers and the much poorer laborers in the rest of Mexico. They will continue to migrate northward in ever-increasing numbers unless the Mexican economy is transformed. So the issue is whether Mexico will export people or goods to the United States. If the answer is people, there will be a continuing drag on U.S. wage levels. If the answer is goods, their manufacture will require many parts and products from the United States. Labor leaders should think again.

Environmentalists are focused on the undoubted pollution and runaway growth seen in northern Mexican manufacturing centers. These factories, for all their faults, are a lot kinder to this planet than antiquated factories in Mexico's old, highly protected industries. Compare the atmosphere over Mexico City, for example, with that of Tijuana. President Carlos Salinas de Gortari has pushed through environmental protection laws that are as enlightened as his efforts to open up and liberalize the Mexican economy. What his government lacks is the financial wherewithal to enforce these laws. Environmentalists should think again.

As showdown votes approach, members of Congress and especially the pro-labor protectionists on the Maryland delegation should also think again. A prospering Mexico will be a cleaner Mexico. A prospering Mexico will be a higher-wage Mexico. A prospering Mexico linked in a free trade zone with the U.S. and Canada will give the North American continent the heft to compete effectively with European and Asian regional trading blocs.

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