Freer Trade, Fewer US Jobs? with the US Economy Struggling, Congress's Stance on NAFTA Will Depend on the Perceived Costs and Benefits. the Monitor Looks at How the Accord Would Affect Some Prominent US Industries. NORTH AMERICAN FREE TRADE AGREEMENT

Article excerpt

WINDING up some 14 months of talks, Canadian, Mexican, and United States negotiators overcame their differences this week to create the world's largest trading bloc, reaching from the Queen Elizabeth Islands in the north to Mexico's border with Guatemala.

In three-way discussions, trade officials resolved differences on trade in a wide range of industries - from telecommunications and automobiles to banking and processed food.

Strong disagreements remain between North American Free Trade Agreement (NAFTA) advocates and detractors in the US. American trade unions and environmental organizations have been charging that NAFTA will encourage US manufacturers to transfer operations and jobs to Mexico, where cheap labor and lax environmental regulations may offer higher profits.

On Monday, Congress's General Accounting Office reported that American assembly plants in Mexico have managed to duck certain environmental laws with the help of Mexican officials. However, the deal allows the US and Mexico to require the same environmental-impact statements on foreign investment and building that they apply to domestic projects. And it says countries and states may maintain environmental standards that exceed international standards.

US manufacturers are aware of vast new market potential for US exports in Mexico. But some producers fear that low-cost Mexican production will flood into the US market and compete with American-made goods.

The Bush administration promises that the agreement will add 400,000 jobs in the US. Treasury Secretary Nicholas Brady asserts that foreign investors are increasingly attracted to the US, where wages are competitive with other leading industrial countries and worker productivity is high. With NAFTA in place, he says, the lure is even greater.

Congress will consider ratification of the treaty sometime next spring, leaving many months open for opponents to air their views. …