COMMENTARY ON COMMERCE : FREE...

Why should we support NAFTA, which will impact not only Mexico and the United States, but in particular Orange County? Trade among Canada, Mexico and the United States will continue to increase with or without the agreement. We are natural trading partners. But the agreement’s guidelines will give the trading partners a “comfort zone”--a sense of stability and predictability.

With the security of a legal framework behind them, North American companies will be able to confidently make decisions necessary to expand production or sales. The free-trade agreement will work because it is in the interest of Mexico, the United States and Canada. We are all neighbors, we share common borders; though our cultures overlap, we are all concerned with the same issues: None of us want to lose jobs, pollute our environment or waste our natural resources.

Mexico

President Salinas and his administration are taking drastic measures to implement economic, political and environmental reforms. During a recent trip to Mexico, I realized that our southern neighbor has undergone a silent revolution in terms of fiscal and economic policy. Mexico still has many barriers to overcome before it can integrate itself fully in a new international economic system, yet it is moving in the right direction and deserves all the encouragement the United States can offer. It is in our best interest to promote a healthy and stable Mexico. In addition to humanitarian concerns, a strong Mexico offers a strong consumer market. As more jobs are created in Mexico, with higher salaries, Mexicans will demand more products and services, and U.S. companies should stand ready to provide them.

American firms need to be prepared to take advantage of the emerging economic opportunities that will result from the agreement. Other foreign companies, those of Japan and Germany, have already established a presence in Mexico.

Foreign investment in Mexico exceeded $4 billion in 1990 and Mexican companies can now be 100% foreign-owned. Furthermore, the Mexican tax structure has been reformed in order to eradicate tax evasion, expand revenue sources and reduce tax levels to correspond with international standards. This shows how Mexico is providing that “comfort zone” to help make business people feel at home.

United States

NAFTA opponents are reluctant to admit that for each $1 billion in U.S. exports there are a possible 22,000 jobs created in the United States. The labor issue is not as cut-and-dried as labor interests portray. Instead of throwing social Band-Aids at the unemployed and impoverished of this country, why not attack the heart of the problem by creating jobs in the export industry and improving U.S. competitiveness abroad? The Japanese created their powerful economy by selling abroad. The United States should heed this example while noting that expanding markets help companies weather a recession. We can do this by supporting the free-trade agreement. The North American Free Trade area is made up of 362 million consumers with a combined GNP of $6 trillion.

The environmental issue is being addressed by the United States and Mexico. Mexico is enforcing tough environmental regulations. In placing these issues at the top of the free-trade agenda, the United States and Mexico should be lauded.

Orange County

California has $4.7 billion in exports to Mexico. From 1987 to 1990 exports increased by 106.9%. Orange County has much to gain from the free-trade pact’s ratification. Developers will have tremendous opportunities to develop infrastructure and to build homes (Mexico needs about 6 million homes). Also, the technological industry has a massive and virtually untapped market in Mexico. The free-trade pact will offer inexpensive manufacturing opportunities to U.S. companies, making the United States more competitive with Asian manufacturers, therefore keeping more jobs from going to Asia.

Also note that Orange County has over half a million Latinos. Local companies and Latino workers and professionals are going to directly benefit from the impact of agreement. The workers’ roots, family and friends have kept them directly linked to Mexico. They are familiar with Latin business practices. These people create a natural bridge between the two countries. Orange County and the rest of the United States should join together to support the efforts of President Salinas and the opening of “Mexico Nuevo” (a new Mexico).