Free trade with Mexico? YES! The bridge must be open . . .

Michael Wilson

May 01, 1991|By Michael Wilson

MORE IS at stake over a U.S.-Mexico free trade agreement than expanding American investment opportunities or keeping Mexican workers from slipping across the border.

If Congress fails to extend "fast-track" authority next month to the Bush administration to negotiate an agreement, the trade talks will collapse. And so will the improving U.S.-Mexican relationship, so vital to Mexico's economic growth and America's influence in the hemisphere.

Mexican President Carlos Salinas de Gortari has an enormous investment in extension of a fast track, which provides for a simple up-or-down, no-amendment vote in Congress on any international trade agreements signed by the president. Never in Mexico's recent history has a government moved so far so quickly to liberalize its economy and expand political rights. Salinas is counting on a trade pact with Washington to guarantee that his reform program succeeds. Indeed, he is gambling it will give his administration the breathing space it needs to fight off his political opponents on the socialist left.

If the deal falls through, Mexicans most certainly will lose confidence in the Salinas administration, possibly sparking a wave of political, economic and social instability.

zTC This is because Salinas has linked the success of his reform campaign to closer ties with the United States, of which the trade pact would be the driving force. A fast-track rejection, therefore, would be viewed as a slap in the face to Mexico City. This could give the socialists political momentum, and all but ensure a reversal of Salinas' efforts to open his economy and generate economic opportunity. The Mexican economy would again become crippled, and thousands of Mexicans would flee to the United States for work. That's not free-market alarmism -- it's economic reality.

During the past two years, the Bush and Salinas administrations together have addressed issues such as drug trafficking, border violence, crime, illegal immigration and the environment. A collapse in the upcoming trade talks would guarantee that these problems get a new lease on life.

Many members of Congress, however, are ignoring the writing on the wall -- wanting instead to appease organized labor, protect special interests in their districts and play partisan politics. The AFL-CIO and environmental groups have joined with congressional liberals to make the defeat of fast track their "number one priority this year."

Free-trade foes claim that an agreement would cost America jobs and lead to massive environmental degradation along the border. In truth, a trade accord could add as many as 150,000 new U.S. jobs in the first several years and will provide Mexico with the economic resources it needs to safeguard its environment.

A failure to open Mexico's rapidly growing market to the United States also would touch off economic shock waves north of the border: It would accelerate the erosion of America's global economic competitiveness and result in a significant loss of American jobs, while strengthening Japan and the European Community. The United States could face a hostile international economic environment similar to that which existed in the 1920s and early 1930s -- a heavy climate of increased trade protectionism and economic isolation.

Presidents Bush and Salinas both seem to understand the implications of failure. Earlier this month, the two leaders vowed to give the trade agreement "100 percent commitment," stressing that it was "in the best interests of both countries." Salinas also reaffirmed his pledge for a clean environment and "the export of goods, not people, to the United States." During the last two years, Bush and Salinas have forged a close and cooperative relationship, unprecedented in the history of U.S.-Mexican relations. What were once distant neighbors are today geopolitical and economic partners.

A free trade agreement would help build an international bridge joining the United States and Mexico, allowing the continued flow of economic, political, and social progress achieved over the past several years. But without it, Mexico will have neither the willingness nor the wherewithal to maintain its pace of internal reform, and the bridge could shut down -- for good.

Michael G. Wilson is an inter-American policy analyst at the Heritage Foundation, a Washington think tank.

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