Dear Uncle, Practice What You Preach

Uncle Sam, put up or shut up. You are good at giving advice but you don’t follow it yourself. That is your problem. Here in Mexico, our problem is that when we do pay attention to you, we cannot be sure that you will allow us to reap the benefits.

You suggested that we balance our budget--and we have done it because it makes sense--even though you have an enormous deficit every year because your expenditures surpass your income. We now have a healthy surplus in our primary budget. If it weren’t for debt service, we would come out ahead each year.

You persuaded us to stop protecting our industry and this has forced us to become export-oriented. But our new foreign trade surplus is rather precarious due to your denied but effective protectionist proclivity.

Since World War II, you have consistently spoken in favor of free trade. Indeed, you did believe in it as long as you were the most efficient producer in the world. But once others began to nose you out in specific goods, you began to zero in with specific protection: “voluntary” quotas, multilateral “agreements,” outright prohibitions, all kinds of nontariff barriers. And you seldom speak of free trade in agricultural products, never in the case of those you grow. All in all, you are estimated to be excluding many billion dollars’ worth of exports from other countries, a good half by means of one so-called agreement imposed on fibers alone.

You have advised us to let in foreign investment, and we have because we need new risk capital--foreign funds and the money that our own investors exported to your banks. But there won’t be massive flows unless and until investors know that they will be able to export their products to you. It’s too dangerous to invest millions in a new factory only to find the door closed once we prove our capacity to export successfully. You have, Uncle Sam, a reputation for forgetting all about the benefits of free trade once your manufacturers or unions get upset about competition.

Let us give you some advice, Uncle. Balance your budget. We know that when our neighbor’s house begins to burn, the flames will reach ours. So we are not happy to see embers glowing on your roof. Do whatever is necessary. But take your hits and take them now.

Take whatever measures are needed to expand your exports to be the equivalent of your imports.

Gently bury your sunset industries. Concentrate on those things you do best. Don’t encourage aged industrial sectors to hide behind their government-issue security blanket. Make them face up to the real world.

Train displaced workers to qualify for other fields of work where higher productivity will bring larger rewards. Don’t condemn them to spend their lives in jobs kept alive through intravenous feeding.

Do what you keep telling us to do. Modernize. Rationalize.

Whatever you do for your own benefit, let us sell to you whatever we can produce competitively as a result of our own ongoing modernization and rationalization. It is to take advantage of these actions that some of us here in Mexico want a free-trade agreement with you. This would give us a reasonable degree of guarantee of access to your market. It would permit Mexico to replace the products of the sunset industries that you will have to phase out in the next decade. In exchange, we can offer you a hundred million potential buyers for your sunrise industries in the next decade. Their purchasing power is, of course, less than the same number of Americans’, but it will be rising again during the 1990s.

Alas, those of us who have faith that we will be able to compete with the “colossus of the north” are still a minority. But if you are willing to open your doors in tandem with us, we are willing to work on our more timorous fellow citizens.

Come on, Uncle Sam. You do your thing, we’ll do ours.