The Nafta Debate: Fact Vs. Fiction

November 11, 1993

During Tuesday night's NAFTA debate, Vice President Al Gore and Ross Perot both made questionable statements to bolster their cases. Some examples:

Poverty and Mexico

Several times during the debate, Ross Perot described Mexico as a country with conditions resembling those of the poorest developing nations, even claiming that "livestock in this country and animals have a better life" than some workers.

But Mexico's economy has been growing rapidly in recent years and its stock market has boomed. Mexico's per capita gross domestic product, a measure of how much the average worker earns per year, stood at $2,680 in 1990 -- higher than many other Latin American countries including Chile and Argentina.

The Impact of NAFTA

The vice president claimed that 22 of 23 economic studies support the administration's view that NAFTA will result in more American jobs. However, the bipartian congressional Joint Economic Committee has accused the administration of double-counting some studies to come up with that figure and ignoring others that predict job losses.

From its own review of NAFTA studies, the JEC said the effect of NAFTA would probably range from a net gain of 200,000 jobs over five years to a net loss of that many jobs. Either development would be relatively minor in an economy that is expected to generate 4.9 million net new jobs over the next five years.

Trade

Gore and Perot wrangled over the makeup of the trade flows between the two countries. Perot contended that half of American export sales were really semi-finished goods being shipped to Mexico for assembly and reshipment to the United States.

Mr. Gore said 80 percent to 90 percent of American exports stay in Mexico and private studies say that figure is closer to reality.

Living Standards

Mr. Perot claimed that Mexican living standards and wages have been falling, something he blamed on the maquiladora program that allows American companies to set up factories in Mexico to manufacture products for sale back into the United States.

But government statistics show that Mexican manufacturing wages, after plunging for a five-year period following the 1982 debt crisis, have been rising in recent years from $1.01 in 1987 to $2.35 in 1992. That's still well below the comparable U.S. figure of $16.17 last year.

Perot and Lobbying

In one of the sharpest exchanges of the debate, the vice president accused Perot of lobbying the House Ways and Means Committee for tax breaks in the 1970s. "You're lying," responded Perot.

In fact, the Wall Street Journal reported in 1975 that Mr. Perot hired numerous lobbyists, including a former commissioner of the Internal Revenue Service, to win a $15 million tax break for his computer firm from the tax-writing committee. The effort to gain the tax break fell apart after the publication of the article. Mr. Perot refused to discuss his lobbying activities at a press conference yesterday.

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