The Sunbelt Moves South
Orme, William A. Jr.
OUTSIDE WASHINGTON. FEW PEOPLE IN THE United States recognize the acronym NAFTA. In Mexico and Canada. the debate over the North American Free Trade Agreement is front-page news. But in the con-...
...Many U.S...
...I don't think it ultimately matters that much what labor says or what the environmentalists say...
...which don't want to unduly antagonize the UAW...
...and luxury passenger vehicles...
...Majorities in both countries would probably agree that a free trade pact that helps U.S...
...and Sen...
...Human rights activists in the United States want guarantees safeguarding the liberty of their Mexican counterparts...
...COECE is already proving itself adept at the Washington game, hiring lobbyists from both the Republican and Democratic sides of the street...
...Mexico is subject- ing itself to closer foreign political scrutiny...
...Though Democratic opposition is building-and the issue may become a rallying cry for the party's presidential hopefuls-it appears likely that the Bush Administration will strike a deal with Mexico that will address ecological and labor concerns only peripherally...
...if EXICO'S TRUMP CARD IS PROXIMITY...
...The U.S...
...critics for poor safety stan- dards and unchecked ground-water contamination...
...manufacturers...
...regulations south of the border...
...The European Community is now just months away from a borderless marketplace-a mar- ketplace that will give preferential access to Eastern Europe...
...Despite outbreaks of dissent, the leadership of the Mexican Labor Congress remains securely inside the ruling family...
...prodding to seek exactly that, it could fatally undermine the Salinas economic program and the mystique of the Mexican presidency itself...
...They argue that free trade will spur foreign investment in Mexico and increase competition for skilled labor, narrowing cross-border salary disparities over time...
...NAFTA would probably receive widespread public support in both Mexico and the United States...
...Lloyd Bentsen (D-Tex)-both fast-track FTA supporters-have demanded that environmental and labor concerns be addressed "either within the agreement itself or through some appropriate alternative context within the same time frame...
...Dan Rostenkowski (D-Ill...
...Computer giants like IBM and Texas Instruments are also staunch supporters...
...To allay Congressional opposition, powerful committee chairs Rep...
...These old Mexican autocenters will be replaced by the emerging manufacturing centers of Toluca (Chrysler, GM...
...For three years he has been defying the maxim that a Mexican leader cannot survive Uncle Sam's embrace...
...One recent bellwether deal was PepsiCo's takeover of Gamesa, Mexico's biggest cookie maker...
...By seeking closer economic ties with the United States and Canada...
...immigration rules would be improved by the successful implementation of a free trade pact...
...Other opponents range from those with drug-war policy grievances (personified by Rep...
...Cross-border business ties are common...
...trade policy: to ship duty-free exports under the Generalized Svstem of Preferences...
...Canada, it seems...
...Volkswagen's Puebla center-the biggest VW plant in the world-is gearing up to replace all U.S.-based VW production for North America, and is increasing exports of parts and kits to new markets overseas...
...These firms dominate cross-border trade: by some estimates, "intracompany" shipments from their Canadian divisions to their U.S...
...Kodak CEO Kay Whitmore and American Express chief James Robinson, for example, have become personally involved in the debate...
...Now employing more than 400.000 workers in mostly low-skill, low-paid, high-turnover jobs, the maquiladoras are rightly fingered by U.S...
...See especially ch...
...the entry-level products for the entire North American region will be manufactured in northern Mexico in top-to-bottom production complexes built by the multinational assemblers--American...
...A former Bentsen aide, Joe O'Neill, is working as a pro-NAFTA lobbyist, Mexican business sources report...
...18, 1991 by-elections for Mexico's new congress will take place after the conclusion of the fast-track debate in the United States...
...since such deals usually reduce overall employment, this phenomenon could provoke resistance from PRI-aligned unions...
...The major Mexican companies, who saw themselves as unilaterally subjected to competition from U.S...
...Business associations in Canada and the United States pushed long and hard for the adoption of the U.S.-Canadian accord...
...economy is most directly dependent on Mexico: labor and oil...
...The Mexican private sector understands this well, and is organizing almost monolithically in support of the free trade plan...
...A North American free-trade pact "will very likely clear the path for a dramatic reorganization of the regional production sys- tem...
...Corporate spokesmen also echo the broader geostrategic argument put forth by the Bush Administration: that Mexican prosperity and (by presumed extension) political stability is inherently in the U.S...
...Canada, however, unlike Mexico, cannot lure U.S...
...political bookmakers say, that the Bush Administration would then prevail...
...especially apparel and sugar refining, while laying the groundwork for a near-term expansion in exports to Mexico of more than $1 8 billion...
...In the debate over NAFTA, however, labor has lost most of its industry allies...
...There is a precedent for the inclusion of union-organizing guarantees in U.S...
...market...
...Indeed, in conspicuous contrast to the United States, there is virtually no public opposition to the accord in Mexico from big business or big labor...
...writers Carlos Fuentes and Carlos Monsiviis...
...Indeed, closer economic integration should lead to closer cross-border political alliances par- alleling the new cooperation between U.S...
...automakers want it...
...imports from Mexico by up to $2.6 billion yearly, nearly a 10% jump...
...ratherthan a nuancedcritique with demands for labor rights guarantees in the pact...
...they argued that only with tariff barriers could they hope to grow as the United States did in the nineteenth century and Japan in the twentieth...
...the Salinas Administration used parallel domestic arguments to preclude discussion of oil marketing and investment policy...
...leaders know the culture and country...
...Mex- ico's purchasing power is barely one-twentieth that of the U.S...
...O'Neill's assignment is just one indication of how the Mexican government has grown increasingly sophisticated in waging public relations and private lobbying battles on U.S...
...However, affected companies are in many cases tied to larger Mexican corporations that stand to benefit from the pact...
...Womack and other indusby specialists say NAFTA's market liberalization will lead Mexican plants to increas- ingly specialize in smaller economy cars and light trucks...
...side by Rodman Rockefeller, the Committee is a lobbying and research organization sponsored by the Council of the Americas, the Chamber of Commerce of the United States, and the American Chamber of Commerce of Mexico...
...The Sunbelt Moves South 1. In Kodak's case, the company is interested both in building up the Mexican consumer market and expanding its use of Mexico as a low-cost manufacturing center...
...By the end of the century...
...though they are in no way comparable to U.S...
...The Mexico-U.S...
...Each country sends about two-thirds of its total exports to the United States and an even higher proportion of its manufactured exports," Weintraub writes.3 "Each country's manufactured exports to the United States are in the same broad sectors, dominated by automobile trade...
...transnationals now interested in operating in Mexico's freer economic environment...
...in an MIT world industry survey, the Ford-Mercury Tracer operation in Hermosillo tallied a lower incidence of defects than any other major factory studied except a Mercedes-Benzplant in Germany.' Ford is spending $700 million to double engine production in Chihuahua...
...With few exceptions, big business associations on both sides of the Rio Grande are lobbying vigorously for NAFTA, which would phase out many foreign investment restrictions and most tariff and non-tariff trade barriers over a period of perhaps ten years...
...if the Mexican opponents of eco- nomic liberalization are being cheated out of election victories...
...market for the past five years...
...market these U.S-based multinationals might close their subsidiaries and reconsolidate operations in the United States, or move offshore entirely r, environmental and human rights groups, U.S...
...In labor and energy supply, in manufacturing and marketing...
...George isn't fighting the battle alone...
...Similarly, for the U.S.-Mexican ac- cord, the opportunity to beat back labor on its proclaimed highest-priority legislative issue for 1991 is an additional incentive towards activism for some corporate free-trade advocates...
...The leading U.S.-based multinationals see NAFTA aiding complementary goals: an increased reliance on Mexico as a low-cost production center, and the longterm development of the Mexican consumer market...
...Environmental issues will be the trade issues of the 1990s, the way intellectual property rights issues were the trade issues of the 1980s," says Timothy Bennett, a former negotiator for the U.S...
...nor Mexican interests...
...and Mexican business groups...
...Hills earlier had opposed the inclusion of labor issues in the negotiating process...
...steelworkers oppose NAFTA, but U.S...
...So could evidence that judges bend the law at the will of high officials...
...Human rights groups get a sympathetic hearing among ideologically diverse Washington audiences with their denunciations of PRI ballot-rigging and personal targeting of political opponents...
...while protecting all parties against sudden unilateral retribution...
...25, (March 1991...
...the economic integration of North America is fast becoming an accomplished fact...
...The CCE has spawned an FTA lobbying group: the Business Coordinator for a U.S.-Mexican FTA (COECE), headed up by mining magnate Juan Gallardo of Industria Minera Mexico, and Guillermo Guemes, a senior executive at soon-to-be-privatized Banamex, the country's leading commercial bank...
...No industry will be more directly affected by NAFTA than the car business, analysts say...
...the Mexico-U.S...
...Mexico's leading glass and cement companies, Monterrey-based Vitro and Cemex, have already bought out U.S...
...steelmakers now favor it...
...The other strong business lobbies opposing the FFA the sugar and fruit growers have little real labor support, given the migratory and semi-documented nature of their work force, and their historic hostility towards unions...
...companies with large Canadian subsidiaries...
...competitors and suppliers in order to expand their North American market share...
...If Congress does not block the extension of fast- track negotiating authority by June 1. the NAFTA treaty will be hammered out behind closed doors and then submitted for a simple yea-or-nea vote in the spring of 1992...
...Business analysts expect an FTA to spur many more mergers and acquisitions by U.S...
...Aguascalientes (Nissan), and Hermosillo (Ford...
...and the future of the Salinas free-market experi- ment is more precarious than its supporters contend...
...Any legal discrimination against foreign investors could quickly become a full-blown trade dispute...
...Trade Representative's office, who is advising Mexican business groups on the NAFTA debate...
...I think Bush will come back from the Persian Gulf swinging his sword like St...
...5. Latinfinance, No...
...It could be argued that expanded legalized cross-border migration is not only the best long-term economic check on ex- ploitative wage scales within Mexico, it would broaden the ranks of potential union members in the north...
...turf...
...The Conference Board--a Fortune 500 symposia coordinator and research organization--sponsored a mid-February NAFTA forum in Acapulco featuring the three countries' trade ministers...
...If Mexico isn't granted an open trade accord, after years of U.S...
...But NAFTA promises to have dramatic implications for immigration patterns, environmental policy, financial services...
...Laced with hypocrisy and self-righteousness though this kind of foreign oversight may be, it would nonetheless pressure the PRI to reform political and legal systems in the direction favored by NAFTA's domestic Mexican opponents...
...and Mexican private sectors, is a chief coordinator of pro-NAFTA business efforts on Capitol Hill...
...In an unstated negotiators' trade-off, the proposed NAFTA pact omits the two sectors where the U.S...
...The forecasts can- not account for the hundreds of future corporate invest- ment decisions that will be driven more by strategic repositioning or political and financial considerations than by a coldly calculated assessment of competitive advantage...
...They tend, therefore, to be less concerned about lowering tariff barriers than about Mexico's adoption of U.S.-style intellectual properties rights and the removal of barriers to majority foreign ownership in "strategic" industries...
...and Jestis Silva-Herzog, the former (1982-1986) finance minister, who recently returned to the PRI fold as the ambassadordesignate to Spain...
...PRI ward bosses aren't the only Mexicans who don't like that idea...
...This was well articulated in an open letter to the Mexican Congress drafted by what might be described as the Cirdenas brain trust...
...It is driven in both countries by the same fundamental anxieties...
...But beyond the issues of OSHA regu- lations and EPA oversight is a more basic question: Will the NAFTA pact give birth to a broader industrial belt along the border, which, by drawing workers from both the U.S...
...as economic ties become more tightly intertwined, this antagonism will increase...
...A DVOCATES AND OPPONENTS CONCUR that the booming maquiladora industry is the best indication of NAFTA's potential for economic growth and abuse alike...
...companies think that they can bequitecompetitive-now it is the Mexican steel companies that are scared to death...
...The AFL-CIO's bedrock anti-free-traders in- sist they would oppose the agreement even if it incorpo- rated such language...
...countries must be certified as respecting basic labor rights (a provision honored more in the breach...
...Among the first areas where Mexican production would replace U.S...
...operations account for fully half of Canada's total manufactured export sales to the United States.3 These companies found ready allies in the government in Ottawa, which was concerned that without guaranteed freer access to the U.S...
...Through the Texas oil and banking industries, all three have had business dealings over the years with Mexico, and with many individual Mexicans...
...propo- nents...
...Were Salinas to be rebuffed by Washington now on such a critical matter, his ability to install a chosen heir would be further compromised...
...Each country feared increased protectionism, particularly through non-tariff measures, so it moved to secure access to the market...
...Bad as they may be, maquiladora health and pollution stan- dards are on the whole superior to the Mexican industrial norm, workers and researchers say...
...labor oppo- sition to NAFTA may represent a significant AFL-CIO break with the PRI-controlled Labor Congress and the beginnings of tactical support for Mexican opposition groups on issues ranging from collective bargaining free- doms to electoral reform...
...The fear that free trade will entice corporations to relocate to Mexico to evade EPA and OSHA regulations has brought labor, human rights, and environmental activists to lobby Congress hard against the accord...
...Voicing disparate complaints to varying constituencies, they have to date been unable to galvanize broad public opposition to the trade pact...
...Proponents of an FTA respond that a ten-to-one industrial wage differential already defines the U.S.-Mexican economic relationship...
...The converse will also occur: Mexican takeovers of smaller U.S...
...Salinas, trying to move faster than Washington wanted or expected, is braving great political risks...
...goods, predicts an Interna- tional Trade Commission study, would be ornamental plants, textiles, and glassware.2 The World Bank estimates that an FTA with Mexico would almost immediately increase U.S...
...says MIT researcher James P. Womack...
...Charles Rangel), to oldfashioned nativists (Congressional backers of "English Only" amendments), to Cold War protectionists (NAFTA "would help Cuba," Florida sugar growers argue, because Mexico would export more of its own refined sweetener, creating a bigger Mexican market for Cuban sugar...
...By their nature, macroeconomic projections extrapo- late an imperfectly measured past into an unpredictable future...
...George, and he will be able to get whatever he wants...
...The slimmed-down U.S...
...The intra-company rationalization prompted by NAFTA will probably result in plant closings in both countries: econo-car assembly lines will be shut down in Michigan and elsewhere in the United States...
...The major corporations leading the lobbying fight have large, long-established Mexican subsidiaries...
...Critics consider it little more than an attempt by U.S...
...The issue, then, is not if Mexico, the United States, and Canada will implement a freer trade regime, but rather when and on what basis...
...Only the textile and garment industry presents a united labor-management opposition front...
...Odds are...
...Business Committee...
...health and edu- cation, labor law...
...6. James Womack et al, Research by International Motor Vehicle Program (IMVP), MIT...
...The breakdown of the GATT Uruguay Round further enhanced the appeal of regionalism...
...Mexican officials acknowledge, is then spent or deposited on the northern side of the border...
...service companies...
...And St...
...Moreover, Mexican companies in several industrial sectors are expected to suffer severely from the impact of an FTA, among them auto parts, paper and pulp, garments, steel, processed foods, electronics, and some portions of the pharmaceuticals and secondary petrochemicals business...
...They urged that the FTA "be pursued slowly, carefully and responsibly, without subjecting it to [electoral] pressures and deadlines," with a "social charter" addressing labor rights, workplace safety, environmental issues and consumer protection concerns...
...European, and Japanese--and their first-tier suppliers...
...At the same time, Mexico is expected to con- tinue to grow in importance as a major net world supplier of engines and other major auto parts...
...Much of the same process can be observed in the case of Mexico, which is courting investors around the world with the pitch that it will soon be the best low-cost route into the huge U.S...
...In response, U.S...
...but by the clout of its proponents...
...ut export-hungry U.S...
...wages and employment in beneficiary sectors...
...That comparative advantage is too costly for everybody involved-too humiliating and unproductive for Mexican dignity and economic development, too costly in jobs and welfare for American and Canadian workers, too destructive of our common environment and civilization...
...Lloyd Bentsen, chairman of the Senate Finance Committee, which oversees trade policy...
...private sector views NAFTA as a tool for the long-term development of export markets in Mex- ico,'' says Laura B. Rawlings, who tracks US.-Mexican affairs for the Overseas Development Council...
...Business Committee, an organization with parallel sub-groups representing the U.S...
...and in trading relationships with the rest of the world...
...making some form of continental economic consolidation seem increasingly inevitable...
...steel industry abandoned its early resistance to the US.-Mexico FTA, and now perceives it as a major sales opportunity...
...will haveonly marginal influenceon the agreement'scalendar and scope...
...4. Although these subsidiaries where originally set up to secure access to the protected Canadian market, their survival in the wake of industrial restructuring in the 1980s, it was believed, depended on their capacity to export to the United States...
...Ecology groups, energized by the well-documented water pollution from (mainly Mexican) border-zone factories and sewage plants, want NAFTA to codify commitments to the bilateral enforcement of environmental law...
...textile and garment makers...
...national interest...
...sayscolleen Morton.directorof the U.S...
...The study asserts that NAFTA will have "limited adverse affects" on a few U.S...
...Heading up a task force on the issue under the aegis of the Mexico-U.S...
...Mexico's judicial system also opens itself to scrutiny...
...The NAFTA accord provides a framework for a twenty-firstcentury relationship that is at least formally based on mutual respect and interdependence...
...Many owners of family-controlled businesses in Mexico would welcome a chance to cash out at the right price...
...jobs...
...When protectionist legislation has succeeded in the United States in the past, it is usually because ajoint laborindustry lobby pressed its case forcefully in Congress...
...the public debate has barely begun-and it may soon be over...
...On the U.S...
...But the Peat Marwick study seemsclose to the mark in predicting that NAFTA will have a far bigger impact in Mexico than in the United States, with the immediateeffects felt most strongly in three key Mexican industries: sugar refining (a projected 32% increase in output and employment), apparel manufacture (a 19% growth forecast), and electronics assembly (16...
...markets...
...Other firms see themselves as logical acquisition candidates for U.S...
...Business Commit- tee released results of a macroeconomic forecasting study by KPMG Peat Manvick, a respected accounting and economic analysis firm...
...Many of these factories represent supplier operations relocated from the U.S...
...the company says it will be exporting 500,000 engines annu- ally to the United States and Canada within three years...
...leading to NAFTA's formal adoption at the beginning of 1993...
...Japan has made it clear that it has only limited interest in Latin America asa market orproductioncenter...
...3. Michael Hart, A North American Free Trade Agreement: The Strategic Implications for Canada, (Ottawa: Centre for Trade Policy and Law, Carleton University & Halifax: Institute for Research on Public Policy...
...Curiously absent from the NAFTA debate in Washington is sustained interest in its impact on Mexican political life...
...Some corporations-driven usually by the personalities of their CEOs-habitually take leading roles in economic policy debates...
...Council of the Mexico-U.S...
...But Ford and Chrysler remain among the strongest corpo- rate advocates of NAFTA-unsurprisingly, since their south-of-the-border subsidiaries are already the two lead- ing private sector exporters from Mexico to the United States...
...lending an exaggerated mathematical certainty to what is ultimately a calculated guess...
...Labor's opposition failed to shape the U.S.-Canadian FTA, but it did help galvanize business activism in sup- port of the accord...
...Chamber of Commerce is orchestrating proNAFTA lobbying efforts...
...If unions don't want factories going south in search of Mexican labor, they ought not to oppose giving more Mexican workers the legal option to move north...
...It could regulate and phase-in the process...
...companies in Mexico...
...in central Mexico-Morelos...
...imports during the past five years, want guaranteed reciprocal access to U.S...
...and security structures throughout North America...
...labor and environmental law would be in neither U.S...
...Critics on both sides of the border are understandably concerned that NAFTA will represent little more than the annexation of the under- paid Mexican work force by U.S...
...The support may be shallow...
...Both are presumed by business observers to be driven as much by their desire to assert personal corporate leadership-and a genuine philosophical conviction that NAFTA will strengthen all three economies-as by the immediate self-interest of their firms.' Far less active publicly, by contrast, are the Detroit Big Three...
...auto manufacturing jobs...
...Trade Representative Carla Hills agreed to prepare a proposal for what is expected to be a parallel bilateral accord addressing the enforcement of Mexican health and environmental regulations, plus separate provisions ameliorating the FTA's impact on U.S...
...Still, support for closer bilateral economic integration in both Mexico and the United States transcends immedi- ate business interests...
...Mexico bridles now at criticism of its cops and courts...
...B USINESS GROUPS ASIDE, DISSENT IN MEXico is significant...
...public debate on may soon be over to low-wage tax havens.4 Conversely, the Mulroney Administration argued, an FTA with the United States could be used as an incentive to attract new foreign investment, both from the United States and overseas...
...but it is also broad...
...But over the long term, even a flawed free-trade pact will set in motion economic and political forces that could poten- tially enrich both societies and set the stage for a fairer continental partnership...
...industry groups (sugar and citrus growers...
...business interests to take advantage ofcheap labor and lax William A. Onne Jr., former Mexico correspondent for the Washington Post, is a jo~rmalist who specializes in Latin American economic affairs...
...Weintraub adds that intracompany commerce between Mexico and the United States is at a "comparable" level to U.S.-Canadian trade...
...whilecar factories in the United States will concentrate on higher-profit vans, heavy trucks...
...Up to the 1910 revolution...
...The statement was signed by academic commentators Adolfo Aguilar Zinser, Jorge G. Castafieda, and Lorenzo Meyer...
...Pro-NAFTA business lobbyists profess greater con- cern about opposition from U.S...
...or Canadian standards...
...These new Mexican assembly operations are already among the most automated and efficient anywhere...
...lvi Many U.S...
...Robinson is pressing for liberalized currency exchange rules and greater foreign investor access to Mexico's banking, stockbroking, and insurance industries...
...Long headed on the U.S...
...This is in part a commentary on the resilience of PRI corporatism...
...Business and government policy makers in both Mexico City and Washington stress the two countries' "interdependence"' '-without noting how skewed that relationship is...
...manufacturing investment with a promise of low wage scales, obeisant unions, and inexpensive real estate...
...indus- tries...
...Even without crossborder free trade, Mexico has been by far the fastestgrowing supplier of autos and auto parts to the U.S...
...Mexi- can steelmakers have little capacity to produce highgrade...
...The U.S...
...Hidalgo, Mexico City-manufacturers may dismantle luxury car and heavy truck plants...
...Much of theauto partsexport industry in Mexico today is concentrated in the border strip of in-bond assembly plants (maquiladoras...
...Reciprocity has long been the bane of Third World countries...
...The Japanese are also entertaining proposals from the Southeast Asian economies for a more formalized "Yen bloc" trading arrangement-in part as a direct defensive response to NAFTA and the EC...
...LEADING THE FIGHT AGAINST NAFTA IS A strange-bedfellow coalition of labor unions, ecology groups, Mexican opposition activists, and threatened U.S...
...in cross-border media penetration...
...subsidiaries closed down anyway, but the Mulroney government contends that without the FTA the exodus would have been worse...
...In late February...
...But it isentirely legitimate for North American politicians to ask...
...of the southbound indus- trial relocation that would be precipitated by NAFTA...
...It is not coincidental, Washington observers say, that the U.S.-Mexico FTA has been pushed from the start by "the three Texans' '--Secretary of Commerce Robert Mosbacher, Secretary of State James Baker, and President Bush himself...
...This sort of collaboration is already evident in the environmental movement...
...producers are increasingly specialized--and which are in high demand by the automotive and petrochemicals industries...
...a U.S...
...If the pact were expanded to address its opponents' concerns about labor rights and en- vironmental safeguards...
...and Mexican economies is inevitable," the six stated...
...Proponents also argue that the prospects for liberalized U.S...
...7. Reported in the Mexican press at the end of 1990...
...both for production and market reasons...
...industry evade U.S...
...This quid pro quo makes sense as a political calculation, but it reduces Mexico's bargaining leverage...
...We fully agree that closer and expanded integration of the U.S...
...market...
...the NAFTA issue won't be decided on its merits...
...PepsiCo cited U.S.Mexican market integration as a key factor in its decision to buy the closely held Mexican company...
...Midwest-a harbinger...
...Most NAFTA opponents are motivated by fears of the loss of jobs and markets, though forces not normally visible in trade battles are also playing prominent roles...
...Northandthe Mexican South, will exacerbatethe regional disparities at the root of each country's deepest historic conflict...
...Moreover, they added, "Low Mexican wages cannot be a permanent feature of North American economic relationships...
...The fate of the 1988 U.S.-Canadian agreement was already decided by the time it began topping the mainstream media agenda...
...If they are, resistance within Mexico to a free trade pact has been underestimated by its U.S...
...The NAmA pact does not preclude future bilateral and trilateral accords on immigration or energy or eco- logical protection...
...their employees emphatically do not...
...I N THE DEBATE IN WASHINGTON OVER FREE trade with Canada, the leading proponents were U.S...
...In fact, a free trade pact that does not expand to include a flexible immigration framework-as the European Community has done-effectively freezes wage differentials within national boundaries, and virtually guarantees further illegal immigration and hostility between neighboring peoples and between labor and management in both economies...
...business supporters see Mexico more as a low-cost production center than as a big new export market...
...Tripling in output over the past ten years, maquiladoras now rival tourism and emigrant remit- tances as Mexico's biggest hard currency earner after oil-though much of this money...
...There is a surprising willingness within Mexican business circles to accede to what amounts to a unilateral forfeiture of traditional privilege...
...By failing to play its strongest card-energy-the Salinas Administration may be missing a historic chance to secure broader legal employment opportunities for the more than one million Mexican citizens working in the United States (thus guaranteeing a stronger stream of remittances...
...It even forecasts a very slight corresponding rise in U.S...
...As in most political disputes, however...
...consular network 50 staffed offices throughout the United States, far more than any other country, with each consulate an invaluable source of local business and political contacts...
...Mexico is alsojust beginning to mobilize its unrivalled U.S...
...The Salinas government favors these changes as a means of attracting foreign investment-the biggest potential source of long-term outside private capital in an age when commercial bankers have foresworn "new money" lending to the Third World...
...Mexico is also counting on the behind-the-scenes support of a fourth powerful Texan: Sen...
...Emigration should also be on the agenda, they said, "since labor is our main competitive advantage in the area of services...
...businesses underscore that Mexico, with a population of 88 million, 47% of whom are under the age of 15, presents enormous longterm opportunities...
...companies...
...In the short term though, U.S...
...union criticscontend...
...Business seems confident that labor can be beaten-- especially since the AFL-CIO has opted for flat opposi- tion...
...Putting immigration on the agenda would have made the NAFTA package unpalatable in the United States, Bush strategists advised...
...The irony is that Mexican authorities are prepared in any event to give the United States most of what it wants on oil: a secure long-term supply developed with U.S...
...Still, it would be simplistic to correlate corporate advocacy of NAFTA directly with each company's business strategy and assets...
...The question now is whether he could survive Uncle Sam's rejection...
...human rights activists and environmentalists...
...high-tolerance steel in which U.S...
...which effectively safe- guarded Mexico's borders and sovereignty to the present day, North American history wasdriven by acontinual re- definition of the relationship between Mexico and the United States-usually to Mexico's detriment...
...In both Washington and Ottawa, business lobbyists had faced off labor lobbyists-and won handily, thanks only in part to the concerted advocacy of both administrations...
...Providentially for the Salinas Administration, the Aug...
...But in the con- tinent's industrial heartland...
...Business Committee is Thomas Enders, a former chief State Department emissary to Latin America, now a senior executive at Solomon Brothers...
...for example...
...2. United States International Trade Commission (Publication 2326), "Review of Trade and Investment Liberalization Measures by Mexico and Prospects for Future United States-Mexico Relations...
...Because it would formalize an ongoing process of regional economic integration, NAFTA could mini- mize the inherent dislocations...
...This group of prominent center-left critics stressed that they do not oppose free trade as such, but are concerned that the agreement as contemplated will reduce Mexico to the status of a permanent supplier of low-cost labor to an otherwise dynamic North American market...
...The 1994 succession is already shaping up as the most difficult since Madero chased out Porfirio Diaz in 1910...
...The U.S.-Canadian FTA "was a way of formalizing a de facto integration that was already substantial," points out Sidney Weintraub of the University of Texas at Austin...
...capital and by U.S...
...side, much of that same coalition is now reassembling to pitch the case for Mexico's inclusion...
...from the rust belt to the sunbelt...
...The Business Coordinating Council (Consejo Coordinadora Empresarial, or CCE), Mexico's umbrella private sector organization, also operates under close governmental vigilance, yet would be overwhelmingly supportive of the Salinas agenda even without official urging...
...4, "North American Trade and Investment Patterns...
...Many analysts say this relocation will only marginally affect the ongoing decline in U.S...
...Trilateral economic partnership could also lead to trilateral diplomatic friction...
...business promotor of bilateral free trade remarked earlier this year...
Vol. 24 • May 1991 • No. 6
