Magazine article Insight on the News

Free-Trade Agreement Is Bordering on Success

Magazine article Insight on the News

Free-Trade Agreement Is Bordering on Success

Article excerpt

Despite misgivings fueled by protectionist candidates during the presidential primary stump, NAFTA has been a plus for the U.S. economies, according to boosters in two border states.

Conservative firebrand Pat Buchanan traveled repeatedly to Texas and Arizona in March, but his protectionist message did not prove popular among the voters there. Free-traders Bob Dole and Steve Forbes triumphed handily in those primaries. Perhaps, pundits and policymakers now explain, that's because the North American Free Trade Agreement, or NAFTA, has had a positive impact on those border states.

"Governor Bush and I are very strong advocates of the agreement," Brenda Arnett, executive director of the Texas Department of Commerce, tells Insight, "because NAFTA has generated investment opportunities, capital and jobs for Texans and increased the well-being of our state's economy."

David Gantz, professor of law at the University of Arizona, agrees. "There is a real consciousness of the benefits of international trade here," he says. "The state used to be known for mining, but today it is increasingly high-tech and global."

Statistics support their statements. According to the Texas Department of Commerce, the state recorded a net gain of 573,000 nonfarm jobs between December 1993 and December 1995, a total higher than any other state. A record 9 million Texans are at work. Unemployment has dropped from 6.3 percent in 1993 to 6.1 percent. Personal income is growing rapidly as wages have increased by 6 percent since 1993. What's more, exports have doubled in recent years, from more than $25 billion to $60 billion in 1994 -- and 40 percent of Texas' exports go to Mexico, with another 10 percent to Canada. Significantly, high technology and chemicals accounted for more than $20 billion in exports in Texas last year.

Arizona's exports to Mexico were $2.4 billion in 1994 and $2.1 billion last year, a dip attributed to the Mexican peso devaluation crisis, says Gantz. Exports to Japan from Arizona -- which boasts new plants by high-tech giants such as Motorola -- were $1.1 billion last year, and a similar total was sent to Britain. Investment in the state and job creation has proceeded apace. Daewoo, the giant Korean electronics company, is expanding its plant on the Arizona-Mexico border. "There were 700 workers there a year ago January," says Gantz. "That has been increased to 1,600 people."

From January 1994 to January 1995, 61,528 workers were certified by the government to have been put out of work by plant closings attributed to NAFTA, according to the Labor Department. "But when you put that in context and contrast the people who have been displaced to those who have new jobs due to job creation, there really is no comparison," Edward Hudgins, director of regulatory studies at the Cato Institute, a libertarian think tank in Washington, tells Insight.

Hudgins and Joe Cobb, a senior fellow in economic policy at the conservative Heritage Foundation, argue that NAFTA still suffers from disinformation spread for political purposes. The United Auto Workers union is working actively to defeat members of Congress -- even Democrats, such as Rep. …

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