Newspaper article St Louis Post-Dispatch (MO)

Salinas, Mexican Experts Say: The Hard Part Starts Now

Newspaper article St Louis Post-Dispatch (MO)

Salinas, Mexican Experts Say: The Hard Part Starts Now

Article excerpt

MEXICAN PRESIDENT Carlos Salinas de Gortari told Mexicans Friday "not to expect immediate effects" from the North American Free Trade Agreement, which he called only a tool toward building a stronger economy.

For jubilant Mexicans who had followed the fate of the pact with attention normally reserved for soccer games, Salinas' speech might have sounded like a sour note amid a sweet celebration. But economists in Mexico say Salinas is correct: For Mexico, getting the trade pact passed was easy; now comes the hard part - putting it into effect.

Vladimir Brailovsky, head of the consulting firm Economia Aplicada, said: "Mexico is simply going to have to roll up its sleeves and get to building a competitive economy. And it's going to be very difficult."

NAFTA is the crowning effort in Salinas' economic liberalization program, an approach that has privatized bulky state industries, opened borders to trade and slashed inflation rates from 150 percent to less than 10 percent.

Jonathan Heath, director of the consulting firm Macro Assesoria Economica, said, "NAFTA is a major turning point in the economic history of Mexico. It will bring more private investment, more job creation and higher income."

Already the signs of change are occurring. In Mexico City's posh Pink Zone district, U.S. chains such as McDonald's and Athletes Foot have set up shop next to new Mexican upstarts like Yuppies Restaurant. Freer trade will only mean more fast cars and fast food for Mexico's hungry consumers.

"Mexico's market is immature, and NAFTA just clears the way for us to take advantage of that," said Vince Lencioni, assistant trade director for the U.S. Chamber of Commerce in Mexico. "This is very good news for U.S. business."

And good news for many Mexican businesses, too. Some of Mexico's bigger business conglomerates - such as glass-maker Vitro, cement giant Cemex and industrial manufacturer Alfa - will benefit from easier access to the U.S. market, economists said. "Two-way trade will increase dramatically," Heath said. Trade between Mexico and the United States is already estimated at more than $40 billion a year, with the United States enjoying more than a $10 billion trade surplus. …

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