The U.S. Needs NAFTA

November 17, 1993

It's too bad Franklin D. Roosevelt isn't around to remind us again that "the only thing we have to fear is fear itself." That is what the controversy over the North American Free Trade Agreement is all about: fear of the unknown. Barriers against imported goods are a security blanket, comforting but deceptive because they really don't protect us. The U.S. economy would be stronger if the trade barriers with Mexico were lowered.

Months of debate over NAFTA, which culminate in today's House vote, have been remarkable for their preoccupation with exaggeration and irrelevance. Opponents have ranged from knee-jerk protectionists, like many union leaders, to irresponsible demagogues with personal agendas like Ross Perot. Ranged alongside them are legislators who fear to vote their private convictions.

Although the terms of the agreement negotiated by George Bush and embraced, belatedly but fervently, by Bill Clinton are very complicated, their essence is comparatively simple. Barriers to trade and commercial transactions would gradually drop with Mexico over a 15-year period, as they have for the past five years with Canada. We will begin buying more from Mexicans, if they have a comparative advantage in production, and they will begin buying more from us where we are the more efficient producers.

Historically this kind of interaction has resulted in greater prosperity on both sides of a growing trade relationship.

All this is a far cry from the flood of jobs from this country to Mexico described by the doom-sayers. Yes, some work would move from the U.S. to Mexican plants. More would flow back here, because the advantages of hiding behind Mexican tariffs wouldn't exist any longer. Yes, wages are lower in Mexico. But productivity is far higher here, and that is what makes a product competitive.

As Mexicans prosper, their plants will become more efficient and their consumers will have more to spend. Wherever this has happened, in the Third World or in the crumbling Soviet empire, U.S. goods have been the most eagerly sought after. The balance will tilt decisively to the United States.

Economic change like this carries a price, though not so large as NAFTA's foes claim. Some workers would be displaced, just as happened to the blacksmith early in this century. But change brings new opportunities. The blacksmith of yesteryear became the auto worker or highway builder. President Clinton has pledged $140 million for retraining in the initial transition period alone. The result will be more and better jobs, not fewer.

NAFTA is an agreement negotiated and signed by a Republican president. A Democratic president has pinned the fate of his administration on its approval. The credibility of this nation, which has preached free trade for generations to others, is at stake. Rejection of NAFTA would undermine not just Mr. Clinton but U.S. leadership throughout the world.

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