Proponents Say O.C. Will Gain More Than Most

The House’s hard-fought approval Wednesday of the North American Free Trade Agreement won hearty applause from most Orange County businesses and economists.

Proponents of the pact said the county is well positioned to seek new opportunities in Mexico because of the preponderance here of the very businesses most needed there: real estate development and high-technology manufacturing.

“Orange County is going to benefit disproportionately from the rest of the nation,” said James Rianhard, executive administrator of Californians for NAFTA, which has regional headquarters in Irvine. “The industries here in Orange County are the industries that are rebuilding Mexico.”

Though union leaders and a few small-business owners expressed fear of losing work to Mexico, those misgivings contrasted sharply with the generally rosy predictions of how the area will fare once trade barriers are lifted.

Several studies support that optimism. A UC Irvine survey of local companies, for example, found that 33% expect to be exporting products to Mexico by 1998, up from only 24% that do so now.

And a Cal State Fullerton professor predicted that exports to Mexico from Orange County companies will rise 15% in the first year after trade barriers are dropped.

“We are specialized in the high-tech products and machines that Mexico is eager to import,” economics professor Vincent Dropsy said earlier this year after publishing a report on the likely effects of NAFTA.

Even some opponents of the accord grudgingly admit that NAFTA isn’t all bad.

“In the short term, it may be good for us,” said Mike Potts, area representative for the Los Angeles-Orange County AFL-CIO Building Trades Council and a staunch foe of the pact. He reasoned that Orange County may see a building boomlet among companies expanding facilities to meet increased demand from Mexico.

Some companies already have a head start. Developers like the Koll Co. are building resorts in Mexico and are scouting sites for U.S. companies that want to put up factories there.

In addition, there could be potential for home builders. Mexico needs 6 million to 10 million new houses and apartment units, said Bill Steele, director of real estate consulting for the accounting firm of Deloitte & Touche in Costa Mesa. The accord includes provisions to open up U.S. financing to build them.

“Orange County developers will benefit in a big way,” Steele said.

The county’s computer makers see the potential as well. Ingram Micro Inc., a computer distributor based in Santa Ana, created a Mexican subsidiary last year in anticipation of the free trade agreement and the subsequent growth of the Mexican economy.

AST Research Inc. and Western Digital Corp., two other computer companies based in Orange County, have been strong backers of the trade accord, seeing potential benefits for themselves as well as for the region as whole.

Some industries are expecting a mixture of gains and losses.

Orange County growers of strawberries, avocados and citrus are concerned that they may be edged out by Mexican farmers who raise the same crops, said William Goodrich, president of the United Agribusiness League in Irvine, an industry group with 700 members.

Cattle ranchers, grain farmers and tomato growers, by contrast, will likely prosper, Goodrich said, because they have either little competition in Mexico or huge market potential there.

Concerns about job security linger among low-wage workers, many of whom patronize the shops and cafes of downtown Santa Ana. If businesses move south of the border, said Jose Martinez, owner of the Carmelina restaurant on 4th Street, layoffs could result.

“They are not afraid,” he said of his patrons, most of whom are Latino, “but they are very worried.”

Martinez said he thinks that white-collar workers will fare well under the accord but that blue-collar workers could be forced out.

“It seems to me most of the jobs that we’re going to lose are held by most of the customers you will find on 4th Street,” he said. “We will keep the guys who write software, but guys who do the welding of the (computer circuit) boards, those jobs will go south.”

How O.C. Delegation Voted

How Orange County congressmen voted on NAFTA:

Congressman District Yes No Rep. Christopher Cox (R-Newport Beach) 47th * Rep. Robert K. Dornan (R-Garden Grove) 46th * Rep. Jay C. Kim (R-Diamond Bar) 41st * Rep. Ron. Packard (R-Oceanside) 48th * Rep. Dana Rohrabacher (R-Huntington Beach) 45th * Rep. Ed Royce (R-Fullerton) 39th *