Mexico pact adds jobs, study finds Accord expected to expand U.S. payrolls by 130,000.

March 02, 1992|By Vlae Kershner | Vlae Kershner,San Francisco Chronicle

WASHINGTON -- Free trade with Mexico would add 130,000 jobs in the United States, even after subtracting 112,000 jobs dislocated by imports from south of the border, a new study concludes.

The Institute for International Economics, a non-partisan, non-profit Washington research group, also found that the proposed U.S.-Mexico-Canada free-trade pact, now being negotiated, would improve the U.S. trade balance by about $10 billion annually.

Still, elimination of tariffs could mean serious problems for some U.S. industries and their workers.

A source close to the Dallas negotiations predicted that if an agreement is reached by mid-spring, it will be submitted to Congress for ratification this year. If not, it probably will have to wait until after the November elections.

To ensure that the deal is ratified, the U.S. negotiating team is consulting regularly with key members of Congress and industry leaders over the fine print, such as the timing of tariff phase-outs.

"You can be pretty sure that if an agreement is reached by the negotiators, it will be approved by the Congress," Fred Bergsten, president of the institute, said at a news conference last week.

The study predicts that Mexican fruit and vegetable growers will make "major inroads" in U.S. markets Mexico's Culiacan region on the Gulf of California has two huge advantages over California, Texas and Florida in production of citrus and tropical fruits, tomatoes, asparagus, broccoli and cauliflower: much lower farm worker wages and year-round frost-free weather.

By contrast, farmers in the Midwest stand to be big winners from free trade because they can produce seven times as much corn per acre as Mexico's small, inefficient farms, and thus have much lower production costs.

In fact, free trade is expected to knock many Mexican corn farmers out of business, leading to the migration of up to 700,000 agricultural laborers into cities.

To cushion the disruptions, the institute urged that the final pact contain a 15-year phase-out of agricultural trade barriers on both sides of the border.

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