Hills Says Trade Pacts Create Jobs : Commerce: The agreement to be negotiated with Mexico is part of a strategy to boost American competitiveness, the Cabinet official adds.

U.S. Trade Representative Carla Anderson Hills said Sunday that free trade agreements such as that to be negotiated with Mexico can create 22,000 U.S. jobs for every $1 billion worth of new exports.

The U.S.-Mexico trade pact, which she hopes to seal by year’s end, is a key part of a strategy to promote U.S. competitiveness and boost exports, Hills said.

She added that exports have accounted for more than 50% of U.S. growth the last two or three years.

“If we limit ourselves to our domestic market, we are going to lose the opportunity to build jobs and economic strength worldwide,” she said on ABC Television’s “This Week with David Brinkley.”

She added that any congressional efforts to restrict her freedom to negotiate a trade pact with America’s southern neighbor would weaken her hand at the bargaining table.

“Because I can’t get the bottom line in any negotiation if my counterpart says to himself, she’s going to have to renegotiate,” Hills said.

Her comments came after Sen. Donald Riegle of Michigan, a senior Democrat who sits on a key trade subcommittee, said he intends to propose a Senate resolution that would allow a U.S.-Mexico agreement to be re-opened for negotiation in five key areas, including labor and environmental standards.

Such a move would run counter to a vote taken by Congress last week that cleared the way for U.S. officials to negotiate a free-trade package with Mexico that legislators could only vote up or down--not accept or reject piecemeal.

The vote, which also gave the same so-called fast-track approval to global trade talks, capped months of intense debate and stiff opposition from labor unions and some consumer groups, who fear U.S. job losses and lack of environmental controls.

Riegle said a limited re-opening by Congress of a U.S. Mexico free-trade package would guarantee that all U.S. interests are protected.

“I think you have to apply the test of whether it is good for 50 states, and I don’t think it is,” said Riegle, who appeared before Hills on the program.

His home state of Michigan already has lost 55 auto plants south of the border and tens of thousands of jobs, he said.

But Hills said a North American free-trade zone--including Canada, which already has a trade pact with the United States--would increase exports and thus create more jobs.

In fact, Michigan is the third-largest beneficiary of recently increased exports to Mexico, she said.

Mexico is America’s third-largest trading partner. With relaxation of import and export controls the past four years, U.S. exports to Mexico grew to $28 billion a year from $12 billion. But controls are still 2 1/2 times higher than those in the United States, Hills said.

“If we could bring them down more, we know that our exports would go up several billions each year,” she said.

Speaking on the same program, Mexican Secretary for Trade and Industry Jaime Serra Puche said he doubts that removing barriers to trade will create a huge exodus of U.S. industry to low-wage Mexico, where enforcement of pollution controls is more lax.

“If you look at any historical experience--for instance in the (European) Community, if you look at Spain and Portugal--the real wages have gone up, not the Germans’ wages gone down,” Serra said.

Riegle said the five areas that he wants to see subject to congressional amendment are labor standards, environmental standards, resolution of disputes, rules on where base products originate and assistance for displaced workers.