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

DATE: FRIDAY, August 6, 1993                   TAG: 9308060146
SECTION: BUSINESS                    PAGE: B5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: MONTERREY, MEXICO                                LENGTH: Medium

SOUTH OF THE BORDER DONS ITS COURTIN' TOGS

\ Dams, highways and bridges are going up across northern Mexico in a profusion of projects intended to attract U.S. investment and trade, with or without a North American Free Trade Agreement.

Along the six northern border states - Baja California, Sonora, Coahuila, Chihuahua, Nuevo Leon and Tamaulipas - workers are giving the region a giant face lift.

Some say the spending on infrastructure - reckoned to be in the billions of dollars in the past few years - is insufficient. Environmentalists are leery. But the Mexican north wants to do business even if the pending accord, known as NAFTA, is not ratified in Washington.

"There's an overemphasis on the trade agreement," said Enrique Zambrano, president of the Chamber of Manufacturing Industry in Nuevo Leon and president of Grupo Proeza, a food products conglomerate. "Mexico's strategy is to make our economy more competitive . . . not to wait or depend on one decision."

The activity reflects President Carlos Salinas de Gortari's economic reforms, which have opened Mexico to a deluge of U.S. imports by slashing tariffs. The reforms also cut inflation to 11.9 percent last year from 51.7 percent in 1988, when Salinas took office.

While Mexico City is the undisputed political heart of the country, Nuevo Leon is an economic power base that boasts some of the developing world's richest companies.

In Monterrey, the state capital, 10 billionaire families run companies making steel, cement, glass, beer, petrochemicals and tobacco. The bustling city of 2 million always has looked to the United States, rather than to southern Mexico.

NAFTA would eliminate most tariffs among Mexico, the United States and Canada, creating a free-trade region with a $6.4 trillion annual gross domestic product and a consumer market of 360 million people.

Opponents say NAFTA would exploit Mexican workers, ruin the environment and lead to a flood of U.S. companies moving south of the border, taking U.S. jobs with them. Boosters disagree.

"Free trade is not a factory closer or a plant mover," said U.S. Commerce Secretary Ronald Brown. "Free trade creates exports and jobs."

Since 1990, Mexico has earmarked $450 million in public works and environmental cleanup projects for the border. The U.S. Environmental Protection Agency has spent $230 million there since 1992 and wants $150 million more.

At a recent conference in San Antonio, Texas, U.S. and Mexican government officials and businessmen said $6 billion was needed over 10 years to improve border housing, electricity, drainage and water treatment.

In the past decade, the 2,000-mile border area has become a polluted industrial belt as 2,000 foreign companies, most U.S.-based, have relocated or opened assembly plants.

The so-called maquiladora plants import raw materials to Mexico and export finished goods, taking advantage of low labor costs. The United States gets cheaper goods. Mexico gets the jobs, but lacks the infrastructure to support the 500,000 workers, many of whom flock to the border region from poorer areas.

Many U.S. companies take advantage of lax enforcement of environmental laws to dump waste in the water systems or the Rio Grande. The American Medical Association has called the border a "cesspool" of pollution and diseases.

Mexico's commerce secretary, Jaime Serra Puche, says the trade accord would improve the standard of living and the environment.

Under this premise, Nuevo Leon began a construction boom two years ago that includes the $650 million, 44,460-acre Cuchillo Dam, 69 miles east of Monterrey, the largest dam in Mexico.

It will bring much-needed water to the city and adjacent towns, possibly decentralizing congested Monterrey by bringing investors to undeveloped areas.

Eleven new international bridges are planned in Nuevo Leon and neighboring Tamaulipas, and Tamaulipas wants a 260-mile canal linking the port of Tampico with the U.S. intercoastal waterway.

The government and private industry have invested $10 billion to build 2,500 miles of new toll highways since 1988.

Two new highways linking Monterrey to Laredo and McAllen, Texas, usually are empty because tolls are $22 for a 100-mile one-way drive in a car, $44 for trucks.