Trade Pact May Benefit Arizona but Cheap Retailers, Other Businesses May Be Hurt by North American Free Trade Agreement

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EL Campos Tires owner Spencer Gifford sold $1 million in tires to Mexican buyers across the border last year. He says the potential for growth under the new North American Free Trade Agreement (NAFTA) is somewhere between "staggering" and "unlimited."

Produce-seller Louis Canez from nearby Nogales, Ariz., says his small business could be wiped out by the influx of far-cheaper vegetables and fruits from Mexico.

"NAFTA is only good for the big stores with big money," he says. "Just like always."

Other businesses believe the trade pact will have little or no effect. "I already do lots of business with Mexicans," says Bill Palsers, owner of Truck Country, a truck retailer. "I don't see how that will change much."

While individual expectations may vary, the collective result of dropping trade barriers between the United States, Canada, and Mexico is expected to be a major boon for Arizona.

The NAFTA agreement was signed by representatives of the three countries on Oct. 14. If approved by lawmakers, the agreement will begin a process of removing all tariffs and other barriers to trade, services, and investment between the three countries over a 15-year period, starting in January 1994.

Great expectations are already turning into increased revenue for businesses. One large Tucson mall sold over $100 million more to Mexicans this year than last.

"There is much good about {NAFTA} for Arizona, and very little bad or ugly," says Gov. Fife Symington (R).

Governor Symington has been trying to jump-start a state economy that flourished during a decade-long real estate boom but was stopped cold by the savings-and-loan scandal of 1989. He calls NAFTA the brightest prospect on his horizon. The governor believes the trade deal could produce 20,000 new jobs in the export trade alone.

State economists are generally sanguine, as well. "The great majority of studies say there will be significant job growth for Arizonans over the years," says Dorothy Bigg, director of international trade for the Arizona Department of Commerce. …