Clinton's Next Continent
MARCH - Africa. April - Latin America. As President Clinton flies to Chile later this month for a summit of the Americas, some familiar questions will arise.
Does this trip involve educating the American people on a neglected continent? Is it about trade? Is it about escaping Washington troubles?
Answer: some of each.
But, while deeply felt educational aims were a focus in Africa, trade should take center stage in Latin America - along with the closely related subjects of immigration and drug control.
Hemispheric trade matters, particularly for US exports facing an Asian slowdown. Despite debate over the first five years of NAFTA (the US-Canada-Mexico free trade pact), one result is clear. Trade has grown. Mexico has displaced Japan as the second largest US export market. (Canada is still No. 1.) And freer access to the US market helped pull Mexico out of its 1995 "peso crash." That recovery reversed major job losses and helped slow a rush of migrants seeking work in the prosperous US.
Mexicans need still more jobs. Unemployment and low pay feed ground troops to Mexico's drug lords. Trade-fed growth should help to limit both migration and drug-running.
Trade also matters for the US in the rest of the hemisphere. Latin American nations buy about one-third of all goods and services the US exports. Beginning with Chile, each of the ABC nations (Argentina, Brazil, Chile) has started to curb bureaucracy and boost private sector growth. Mercosur (a free market joining Argentina, Uruguay, Paraguay, and Brazil) didn't wait for tardy negotiations with the US to begin. It is already bargaining for increased trade with Europe.
Unfortunately, Mr. Clinton will arrive at the Santiago summit with a weak hand. His failure to persuade his own party leaders to give him "fast track" trade negotiating power means he probably won't be able to expand US free trade southward until at least after US elections, if then. That's one more casualty of Clinton's legal problems. He can't afford to alienate a big bloc of supporters: union-backed Democrats wary of Latin wage competition.
That concern is understandable, but misleading. It overlooks jobs created or saved in US export industries. It ignores the slowdown in Asian buying. And it fails to account for job competition here in the US if more jobless Latinos feel forced to go north.
Ultimately, trade helps both workers and consumers - north and south.