A Pact Worth Having
IF some Democrats hope to trip up George Bush by linking the US-Mexico free trade proposal to unemployment and economic downturn at home, they could end up doing the stumbling. The free-trade pact will doubtless threaten a number of American jobs, but its long-term benefits will more than make up for that. Unimpeded trade will sharply stimulate a Mexican economy that's starting to emerge from the doldrums of the '80s. President Carlos Salinas de Gortari has tied economic liberalization in Mexico to expanded trade with the US, and the resulting prosperity should provide both a larger market for American exports and better jobs and income for Mexicans.
The latter, of course, will do more than stronger border patrols ever could to stem illegal immigration into the US.
Some commentators, such as Rudiger Dornbusch of MIT, liken Mexico's outlook for growth under a free-trade pact to that of Spain after inclusion in the European Community. The expanded market benefited both Spain's less developed economy and neighboring powerhouses like Germany. Professor Dornbusch argues that increased Mexican imports have already produced 150,000 new jobs in the US over the past five years, with much more to come as trade grows.
Economic benefits on the northern side of the border, however, are comparatively small next to the pluses for Mexico. And these transcend the financial: Mexico's slow evolution away from corrupt, one-party rule could be speeded by the breakup of calcified, state-centered economic interests under a free-trade regimen.
And the drawbacks?
Parts of the US will suffer economic dislocation as some kinds of manufacturing work migrate southward. Industries particularly affected should get special attention in the pact, such as a longer phase-in period to allow time to retrain workers.
Mexico's traditionally lax environmental regulation presents a major hurdle to trade negotiators. But Mr. Salinas has been talking tough on this issue, and any final agreement should incorporate a realistic schedule for enforcing effective environmental regulations in Mexican plants. Likewise, an agreement should be reached on safe labor practices, including enforcement of child-labor laws.
Free trade won't happen overnight. It should be phased in with due concern for labor and environmental issues. But its benefits to both countries shouldn't be blocked by shortsighted politics. Congress should give President Bush the "fast track authority" he needs to move the pact with Mexico toward fulfillment.