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

DATE: TUESDAY, August 17, 1993                   TAG: 9309120283
SECTION: EDITORIAL                    PAGE: A5   EDITION: METRO 
SOURCE: JOSE ANTONIO ALONSO ESPINOSA
DATELINE:                                 LENGTH: Medium

NAFTA IS NO `SHOTGUN MARRIAGE'

AS A MEXICAN businessman, it strikes me that much American discussion of the North American Free Trade Agreement focuses less on the agreement and more on economic, social and political disparities between Mexico and the United States. This discussion ignores the enormous progress Mexico has made in the past six years and the benefits trade liberalization will bring to both countries.

Sen. Ernest Hollings, D-S.C., described NAFTA as a ``shotgun marriage'', implying that Mexico is still too primitive to be a fit trading partner. A sober regard for the facts, however, makes a compelling case for Mexico and NAFTA.

Mexico is no United States. It has only one-tenth the per capita gross national product and one-third the population. Loss of half of our territory to the United States in the mid-1800s and subsequent American domination caused Mexicans to equate patriotism with anti-Yankeeism. Our wariness helped to create a tradition of a heavily centralized state and to spawn illiberal policies of protectionism, import substitution and state intervention. Plenty of blame rests with previous Mexican governments. But Mexico has experienced dramatic change over the last 10 years.

With the oil-price collapse and debt crisis in the early 1980s, Mexico embarked on a painful long-term process of economic reform based on free-market principles. Under President Carlos Salinas de Gortari, Mexico's decades-old traditions of protection and intervention were replaced with massive privatization and deregulation.

Consider:

Tariffs have been slashed from more than 100 percent to around 10 percent, and under NAFTA will be phased out entirely.

Inflation was reduced from 160 percent to less than 15 percent.

Mexico joined GATT in 1986 and threw open its economy to foreign investment.

U.S. exports to Mexico have nearly quadrupled since 1988, to $40.6 billion in 1992.

Much remains to be done. The economy is growing at a healthy 4 percent, but it can only create one new job for every five entrants into the work force. Mexico realizes that decentralization and openness are the path to higher living standards. Presidents Reagan, Bush and Clinton have supported our efforts.

Hundreds of U.S. companies from scores of U.S. states are now engaged in an aggressive commercial relationship with Mexico, satisfying my country's hunger for high-quality goods and services. According to the U.S. Department of Commerce, 800,000 U.S. jobs are currently directly related to U.S. exports to Mexico, two-thirds of them created since 1987. Caterpillar sold 11 big machines to Mexico in 1983; in 1991, 1,200. Aldus and Microsoft have seen software sales rise sharply, protected by new and strict anti-piracy laws. The state of Washington saw the value of its exports to Mexico triple between 1987 and 1991, to $241 million.

NATFA will solidify and expand reforms in Mexico. Study after study has concluded that the agreement will improve the welfare of citizens of both countries.

Like the United States, Mexico needs exports to boost economic growth. Mexico has also greatly increased its spending to enforce environmental laws and improve working conditions. Implementing NAFTA will improve the environment along the Mexican-U.S. border: NAFTA has the most extensive environmental and labor standards of any trade agreement.

As in the United States, some in Mexico would prefer the old days of xenophobic nationalism and protectionism. Many progressive Mexican entrepreneurs stand to lose a great deal as the economy is thrown open to further foreign penetration. Every new American fast-food restaurant that opens on a corner in Mexico means one less restaurant will be created and owned by Mexicans.

But as we approach the final decision on NAFTA, responsible Mexican and U.S. leaders should promote the long-term interest of all citizens, while seeking to ease the transition of those in both countries adversely affected by trade liberalization.

Mexico has shown its fitness to join the United States and Canada in forging a vibrant, $7 trillion market of 360 million consumers. NAFTA is neither a ``shotgun marriage'' nor a marriage made in heaven. It is a partnership based on mutual self-interest and respect that will promote growth, stability and cooperation in North America.

\ Jose Antonio Alonso Espinosa is chairman of the board of Grupo Espalse S.A. de C.V. in Mexico.

The Washington Post

by CNB