In Maryland, NAFTA is viewed with both eagerness and dread

September 12, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- Peter A. Bowe expects his business to grow in coming years, but Michael Clifford fears he'll be out of a job -- contrasting prospects triggered by the North American Free Trade Agreement.

As in the rest of the nation, there will be winners and losers in Maryland if Congress this year approves the treaty to create the world's largest free-trade zone. NAFTA -- the focus of a Clinton administration lobbying push this week -- would link the United States, Canada and Mexico in a common market of 360 million consumers with a shared annual output of $6.5 trillion.

An expanding Mexican economy could bring orders -- and jobs -- to Maryland in industries from poultry breeding to dredge manufacturing. Meanwhile, heightened competition from low-wage Mexican workers in textiles, construction and other industries could rob business and jobs from the state.

But the net loss over the decade could be a mere blip -- fewer than 400 jobs -- according to a University of Maryland study of the impact of free trade with Mexico.

Why such a modest impact for an historic treaty? Because a free-trade zone already exists between the United States and Canada, and Mexico's economy is equivalent to just 4 percent of the U.S. economy. Maryland's exports to Mexico last year were $59.2 million, barely more than 1 percent of the state's global exports of $4.9 billion.

Still, the trade statistics belie a more dramatic impact on specific plants and workers in Maryland. Mr. Bowe, president of Ellicott Machine Corp. International, stands to be one of the winners.

Ellicott, the 108-year-old Baltimore manufacturer, which made the dredges used to build the Panama Canal early this century, still sells south of the border. And it expects business to pick up.

"We are convinced NAFTA will be good for us," said Mr. Bowe, whose company sold two small dredges for just under $1 million to Mexico last year. "Mexico doesn't have any local dredge builders, so their only source of equipment is imports."

He sees export sales growing if Mexico lowers its 20-percent-to-25-percent tariff on U.S. dredges, while keeping them in place for non-American products. The environmental side agreement to NAFTA, which calls for the U.S.-Mexican border to be cleaned up, could also boost demand for Ellicott's machinery.

"If the Mexicans spend more money cleaning up wet environmental problems, contaminated ponds and lagoons, that will be good for us," Mr. Bowe said, adding that NAFTA could cause him to add to his 100-strong work force. But he would not speculate on the number of potential hires.

To Michael Clifford, the treaty is more threatening. He fears that his job as a loom support worker at Owings Mills-based Lion Brothers Co., which makes embroidered emblems, could be shifted to low-wage Mexico.

"The garment industry is going to take it on the chin," said Mr. Clifford, who makes $7 an hour.

A fellow worker, Carroll Watkins, a loom technician who has been with Lion Brothers for 24 years, is nervous, too: "All our jobs are in jeopardy. They could be here today and gone tomorrow."

Susan Ganz, the company's president, did not return phone calls for comment.

A union official, Jerry Gingrich, is busy relaying these fears to undecided members of the Maryland congressional delegation, hoping to persuade them to vote against the treaty. Most the delegation's 10 members haven't taken a firm stand on NAFTA.

"The playing field is not level," said Mr. Gingrich, manager of the northern district council of the International Ladies Garment Workers Union, which covers Maryland and part of West Virginia. "Technologically, we can compete [with Mexico]. With labor we can.

"But with wages we can't. That's the only thing. If I were an employer or manager who wanted to go into business and wanted to make a quick profit, zap, just send me down to Mexico."

That scenario, the AFL-CIO fears, could put as many as 97,561 Maryland jobs -- 4.69 percent of the state's work force -- in jeopardy if NAFTA is passed.

That's based on employment in the eight industries most likely to suffer NAFTA-related job losses, according to the Economic Policy Institute, a labor-backed Washington think tank. The industries: motor vehicles and equipment; electrical machinery, equipment and supplies; apparel; food processing; furniture and fixtures; leather; stone, glass, clay, cement and pottery; and other manufactured goods.

The institute suggests that NAFTA "significantly increases the incentives" for companies in those fields to head south. (The study did not take into account the potential job gains from increased exports.)

Although jobs in the auto industry are listed as "vulnerable," local leaders of the United Auto Workers union say they are not worried about sudden changes at the General Motors van assembly plant in Baltimore. The Broening Highway plant employs between 3,000 and 3,500 permanent and temporary workers.

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