Big U.S. Manufacturers Band Together and Beat the Drum for NAFTA : Commerce: Many firms that export to Mexico say the trade pact would create scores of U.S. jobs.
Despite mixed reviews elsewhere in the United States, the proposed North American Free Trade Agreement is playing well in Peoria--or at least at the Caterpillar Inc. factory there.
Caterpillar, the largest non-government employer in Illinois, is one of a number of U.S. companies loudly touting the business they do with Mexico as Nov. 17 approaches--the date for Congress to vote on NAFTA.
U.S.-Mexico trade has created thousands of U.S. jobs--and many more will be created if NAFTA is approved, the companies assert. Caterpillar, for example, recently announced a $47.5-million sale of earth-moving machines and other highway construction equipment to Mexico. The heavy-equipment maker, a leader of the Illinois Coalition for NAFTA, estimates that 1,300 jobs at its plants and 2,700 jobs at those of its U.S. suppliers are related to sales to Mexico.
“We have a very good story to tell about our success in Mexico,” said Tim Elder, Caterpillar’s manager of governmental affairs. “It strikes at the very heart of arguments that (Texas billionaire Ross Perot) and others have made that NAFTA will cost U.S. jobs. That ‘giant sucking sound’ is really the sound of Mexico sucking in more Caterpillar products.”
Caterpillar said it exported $200 million in machinery to Mexico last year--10 times what the company sold there a decade ago. If Mexico’s 10% to 20% tariffs on heavy equipment were eliminated--as they would be under the proposed agreement among Mexico, the United States and Canada--the company could increase sales, creating more jobs, Elder said.
Publicity about such U.S. sales to Mexico is being orchestrated in part by the Mexican Investment Board, a joint venture of the Mexican government and private industry to promote investment and trade in the country.
In addition, the rise in U.S. sales to Mexico--which have nearly doubled over the last five years, to $40.6 billion--has created a constituency of exporters in the United States with a vested interest in NAFTA’s approval. The companies claim that the agreement would foster an export bonanza.
Archer Daniels Midland Co., the Decatur, Ill.-based grain giant, says it expects sales to Mexico to increase sixfold, to $361 million, if NAFTA passes. Birmingham Steel in Alabama would be able to sell finished steel products directly to customers under the agreement, doubling its exports to Mexico, the company projects.
But mostly it is jobs that are emphasized in the flurry of press releases that corporations and the Mexican agency have distributed in recent weeks.
Cal-State Lumber Sales Inc., a wood products firm, expects to add 30 to 50 jobs at its 110-employee plant in San Ysidro, Calif., if NAFTA passes.
The company says it has five times as many workers as three years ago, before it began exporting to Mexico. Sales have grown to $169.6 million from $14 million over the same period, it said.
Another press release from the Mexican Investment Board claims that growth from sales to Mexico is sustaining jobs in California’s struggling timber industry.
“It’s part of a whole campaign by corporations to sell this agreement,” said Matt Witt, spokesman for the Teamsters union, which strongly opposes NAFTA.
The campaign counters NAFTA critics such as Perot and labor union leaders who predict that the accord would encourage U.S. companies to take manufacturing to Mexico in search of low wages and lax anti-pollution enforcement.
Convincing Americans that NAFTA will create more U.S. employment is crucial to getting the agreement through Congress, supporters say.
On a recent trip to Mexico to study Spanish, U.S. Rep. Jim Kolbe (R-Ariz.) told reporters, “This is going to be fought on the basis of jobs.”
Even corporations that have already taken some jobs to Mexico claim their operations there still create jobs on U.S. soil.
“We purchase every year about $35 million worth of goods from more than 40 U.S. companies for use at our Mexican plants,” Fermin Cuza, vice president of international trade and government for Mattel Inc., the El Segundo-based toy maker, said in a press release from the Mexican Investment Board.
“In contrast, Mattel’s five Asian manufacturing plants use almost no U.S. materials in their production,” he said. “Under NAFTA, it is likely that Mattel would shift more of its Asian production to Mexico, to the benefit of U.S. industries and workers.”
Cincinnati-based Procter & Gamble Co., which also manufactures in Mexico, said it and its suppliers could add 2,000 U.S. jobs over the next three years if NAFTA passes.
The Teamsters’ Witt, for one, is skeptical of such claims.
“Many of these companies will be moving jobs to Mexico if NAFTA passes,” he said.
