
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 29, 1993                   TAG: 9309080414
SECTION: EDITORIAL                    PAGE: A8   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Short

NAFTA

ALL THREE parties to the North American Free Trade Agreement - Canada, Mexico, and, yes, the United States - will benefit from the treaty, according to a new study by the Congressional Budget Office. The report by the CBO, hardly a voice of foreign lobbyists, big businesses or right-wing ideologues, confirms results of other studies. But will Congress listen to its own research agency?

The CBO's analysis says NAFTA would have a small, and mixed, but net positive effect on the U.S. economy. It would bring lower prices for consumers and net increases in jobs and income for workers - notwithstanding the resistance to freer trade by presumed champions of both consumers and workers. It also would eventually reduce pressure on illegal immigration from Mexico.

To be sure, freer trade will produce losers as well as winners. There will be pain and dislocations in all three countries. But that is what happens when labor and capital are shifted from less profitable uses to more profitable uses, a major result of freer trade, and there are ways to ease and hasten the transitions.

As for the alleged environmental havoc NAFTA would wreak, the CBO study notes that ``the quality of the environment in Mexico should benefit from economic growth and a rising standard of living.''

Increased trade, as Adam Smith showed centuries ago, allows each country to do what it does best, with net gains for both nations. America, in any case, must not stake its future on attempts to protect low-skill jobs. The world economy won't pay high wages for them.

by CNB