NAFTA a Likely Plus for Orange County : More Jobs, Biomedical Industry Growth Are Predicted

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Some time ago, a delegation of Orange County business people went without much fanfare to Mexico to explore the opportunities that might lie ahead in the North American Free Trade Agreement. It was long before all of the current debate about whether the pact would be good for the American economy, or whether it actually would result in a loss of jobs to other countries.

Today, as the interest in NAFTA has peaked, and as the Clinton Administration battles opponents even within its own party on behalf of the accord, such forays into the uncharted international waters, as that trip was, seem now very significant as a precursor of things that might be.

The acronym for the accord, NAFTA, was not even part of the public lexicon at that time. But now the public’s awareness has heightened, and a new Cal State Fullerton study has found that the proposed free-trade agreement would cause an economic boom for Orange County, creating about 10,000 new jobs by 1999.


According to economist Vincent Dropsy, sales of Orange County-made goods to Mexico would increase by as much as fivefold, to more than $1 billion a year, if existing trade barriers with Mexico were lifted. That’s good news.

The estimate is that Orange County medical device manufacturers, for instance, now face an additional 16% cost added to their products at the border. In fact, the elimination of those tariffs, and the lowering of others, would be very favorable for Orange County business, according to the study.

The study also estimates that the $227-million annual trade surplus that Orange County has with Mexico actually would increase five times by the end of the decade.

And what about jobs? The study finds that there would be some job losses, as opponents of NAFTA have feared. But for every one lost there would be an impressive eight to 10 created, according to the research.

It’s hard to argue with those numbers. And, by the way, not all agree that they are accurate. Opponents such as Diane Kimberle, research director for United Food and Commercial Workers Local 324 in Buena Park, questions the study, arguing that the U.S. Department of Commerce and Department of Agriculture and others suggest different conclusions.

But Orange County, positioned as it is with manufacturing industries in machine parts, medical instruments, electronics and computers, seems well positioned to benefit from NAFTA. Dropsy suggests that lower tariffs especially would have an immediate impact.


All of this adds up to some persuasive local fuel for the argument that the agreement would help the U.S. and Southern California economies. As we have said before, NAFTA will not be a cure-all for everything that ails us, from unemployment to the recession. But it can both help U.S. exports and the Mexican economy, too, while making for better relations with our neighbor to the south.

Orange County businesses seem especially well-positioned to take advantage of these benefits. The problem now is trying to get beyond the noise that many knee-jerk opponents are making, and the smoke-screen arguments that have been raised in opposition. We need to get to some realistic appreciation of the trade accord’s likely benefits.

It may be that other parts of the country would be affected in various ways, but Orange County seems to come out a real winner. For the biomedical industry and others, the pact now under consideration with Mexico and Canada would be a real boon.