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Strong Surge in Trade Under NAFTA Found : Commerce: Positive figures are clouded by a sharp rise in the imbalance with Japan. U.S. exports for June set a record.

TIMES STAFF WRITER

Trade between the United States and Mexico continues its strong growth in the wake of the North American Free Trade Agreement, with southbound products jumping by 17% and northbound goods surging 19% in the second quarter, according to figures released Thursday.

Improved trade with Mexico helped push overall U.S. exports in June to a record $58.17 billion, a 3.6% increase from May, bumping the nation’s trade deficit down 1.6% to $9.37 billion. The rise was led by sales of aircraft and telecommunications and computer equipment.

But the nation’s nettlesome trade deficit with Japan worsened again, shooting up $1.13 billion to $5.52 billion in June, the U.S. Commerce Department said. That was the biggest gap since March.

The stepped-up traffic to Mexico was led by auto parts, telecommunications equipment, plastics and other products, pushing U.S. exports to $12.6 billion over the three months ended June 30. The 17% increase from the comparable period in 1993 was similar to the first-quarter gain, evidence of the impact of the effects of the accord, which went into effect Jan. 1.

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Mexico’s exports to the United States grew even faster in the latest quarter, totaling $12.05 billion, up 19%. Mexico’s exports were led by petroleum--reflecting a rise in the price of crude oil--as well as autos and televisions.

The trade agreement seeks to do away with all trade barriers between the United States, Mexico and Canada over a 20-year period. And while producers of some products are complaining of snags and bureaucratic obstacles, there seems to be little doubt that NAFTA is stimulating trade.

Trade between the United States and Canada also grew, by 10% in each direction, according to Commerce Secretary Ronald H. Brown, who held a news conference to tout the North American trade figures. He called NAFTA “a win-win-win situation. All three countries have benefited by NAFTA.”

The trade figures were the latest in a string of good economic news preceding Mexico’s presidential election Sunday. The Mexican stock market has surged over the last month and short-term interest rates have fallen, signs of optimism that the elections will be orderly and that the Mexican economy will continue to open up and modernize.

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Mexico’s manufacturers are shipping more goods not only here but to the world, a strong sign that the country is on the verge of major economic growth if the elections go smoothly, said Josue Campos Campuzano, an economist at CIEMEX/WEFA, a Philadelphia think tank specializing in Latin America.

NAFTA benefits are also being seen in U.S. border states where financial and legal services are gearing up for a major post-election surge in trade, said Fiona Sigalla, an economist with the Federal Reserve Bank in Dallas.

But U.S. producers of bulk commodities, plastics, heavy machinery and electronic equipment are already benefiting from NAFTA.

“NAFTA is unfolding as we anticipated,” said Michael Hissam, a General Motors spokesman based in the auto giant’s El Paso regional office. “In the first six months of 1994, GM exported more than 4,500 cars and trucks to Mexico. That compares to 350 during the same period of 1993.”

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Associated Press contributed to this report.

Trade With Mexico

U.S. exports to Mexico, in billions of dollars:

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Second quarter (1994): $12.61

Mexico’s exports to the U.S.:

Second quarter (1994): $12.05

Source: Commerce Department

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