Free Trade Pact Won’t Cost American Jobs, Hills Says

Stumping for the trade pact that she and teams of negotiators spent a year crafting, U.S. Trade Rep. Carla Anderson Hills said Friday that the recently announced agreement relaxing trade rules with Mexico and Canada will not cost jobs in the United States or harm the environment as opponents contend.

In fact, U.S. businesses will benefit the most from the North American Free Trade Agreement because Mexico’s trade barriers against U.S. products are more formidable than are U.S. barriers to Mexican products, Hills said in a speech before Town Hall of California in Los Angeles.

Although some jobs will be eliminated when companies choose to shift production to Mexico, new jobs will be created as exports increase and corporations are able to take advantage of lower costs of production south of the border, she said.

“A free trade agreement will save U.S. jobs by enabling our companies to remain competitive relative to Asia,” Hills said. As an example, she pointed to General Electric’s contention that the low cost of its Mexican-produced components saves or creates three U.S. jobs for every job it puts in Mexico.

“Because of the dramatic differences in wage rates, it is not easy to persuade people that jobs won’t be lost,” Hills said. If labor rates were the only factor in deciding where to locate a manufacturing plant, “then the Dominican Republic would be an economic superpower.”

As for pollution fears, Hills called the pact “the greenest agreement in trade history,” with several provisions to protect the environment and to prohibit trade in goods that don’t meet the standards. In addition, growth sparked by the agreement will give Mexico the resources to better protect its environment, she said.

Hills said she hopes a final text of the agreement will be available by Sept. 15, although Congress won’t consider it until next year.