Newspaper article St Louis Post-Dispatch (MO)

NAFTA Holds Lots of Gifts for America

Newspaper article St Louis Post-Dispatch (MO)

NAFTA Holds Lots of Gifts for America

Article excerpt

So many lies have been spun around the North American Free Trade Agreement by propagandists tapping into our darkest economic fears that the treaty has come to sound like a bargain with the devil.

To read the agreement, however, is to find a surprising commercial victory for the United States. Mexico - which for generations walled the Yanqui out - is agreeing to tear the barriers down. Mexican tariffs and restrictions against foreign goods are far tougher than ours, so we would be winners in this exchange.

Under NAFTA, nearly all barriers to manufacturing trade between the United States and Mexico would be removed over 10 years. Within 15 years, the last tariffs and quotas on agricultural goods would disappear. American autos and auto parts, computers and other goods, which now face high tariffs at the Mexican border, would be admitted duty-free, creating large markets for American goods.

At present, some U.S. companies build plants in Mexico to avoid those tariffs at the border. When tariffs come down, it would be cost-effective to build or expand plants in America and ship from here.

Barriers to American investment, financial services and construction would similarly be lifted. The tariffs hampering other countries, however, would remain. That gives the United States an inside track. For example, American construction companies, bidding on the exploding number of Mexican public-works projects, could more easily underprice competitors from other countries.

In return for this unprecedented access, Mexico will get the investment it needs to speed its development. This would be a great legacy for our children: a richer, more prosperous country to the south, whose rising standard of living would create jobs on both sides of the border.

The new jobs in America would come from growing exports of goods and services. Since Mexico started lowering tariffs unilaterally in 1986, according to a Merrill Lynch economic study, U.S. exports to that country have risen 230 percent to $40.6 billion.

Merrill's municipal bond analyst, John Hallacy, notes that since 1987, 48 out of 50 states have increased their exports to Mexico: industrial machinery and transportation equipment from the Midwest, electronic equipment from California, farm products from Arizona. …

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