Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, September 1, 1993 TAG: 9403170003
SECTION: EDITORIAL PAGE: A7 EDITION: METRO
SOURCE: GEORGE W. GRAYSON
DATELINE: LENGTH: Medium
The key to the United States' future economic success as a nation lies in expanding commerce by opening global markets and promoting unfettered trade among nations. The North American Free Trade agreement exemplifies a trade pact that will greatly increase the number and quality of American jobs, while benefiting American businesses and consumers.
NAFTA will open the economies of Canada and Mexico to U.S. companies and create the world's largest free-trading bloc, encompassing 370 million people who each year produce more than $6.5 trillion in goods and services. Over the next 15 years, tariffs and other barriers to trade between Mexico and the United States will be eliminated. As a result, all three countries will have greater opportunities for growth as more goods and services flow among them.
Most people do not immediately think of Virginia when they contemplate expanding trade with Mexico. Yet the Old Dominion has already achieved major gains from liberalized trade with our cornucopia-shaped neighbor to the south. In fact, Virginia ranked among the top half of states in the value of exports to Mexico in both 1991 and1992.
During the past four years, Virginia's exports to Mexico have soared an incredible 286 percent - with total shipments exceeding $158 million in 1992. During that same period, Virginia exports worldwide only grew by 63 percent.
A case in point is Rubbermaid Commercial Products of Winchester. In April 1990, the firm contracted with RCP Grupo San Cristobal to market its products through its commercial division, Cristobal. The venture has been highly successful - with first-year sales exceeding $4 million and additional export opportunities opening in Mexico and Central America.
In addition, the Mexican market is extremely important to Pulaski Furniture. In fact, Mexico is the company's third-largest market. The company's total export sales have skyrocketed over the past six years, growing by 78 percent to reach a total of $9.8 million in 1992. Approximately 10 percent of these sales are attributed to Mexico.
The Williamsburg Pottery, which has purchased land in Tamaulipas state, which lies cheek by jowl with Texas, is also exploring ways to strengthen its commercial ties with Mexico.
All told, manufactured exports to Mexico and Canada now support some 15,000 jobs in Virginia, with about 2,000 of those having been created in just the past five years. Further liberalization of trade and investment with Mexico because of NAFTA will result in even more trade, and a gain of more than 1,600 jobs for Virginia.
These new jobs that have been and will be created in the commonwealth as a result of expanded exports to Mexico are quality jobs, too. For instance, 98 percent of Virginia's sales to Mexico are manufactured goods, which provide jobs paying 17 percent more than the average U.S. wage. Many of the new jobs will be in the industries of the future such as computer technology, industrial and electronic manufacturing, transportation equipment production, and chemical development and output. Banking, insurance, tourism, and other service industries will immediately have increased access to the multibillion-dollar Mexican market.
Beyond the attractive trade opportunities that will accrue to Virginia from NAFTA, the accord will give America greater leverage in dealing with the huge trading blocs of the European Community and Pacific Rim. A strong U.S. economy depends upon our remaining competitive internationally, and NAFTA will help us do just that.
But increased access to new markets - for the United States and Virginia - will not take place if we retreat from the world and adopt myopic protectionist polices here at home. Beating the competition, rather than avoiding it, is the key to a more robust U.S. economy in a rapidly changing world.
NAFTA is a giant step in the right direction, and Virginians should support it. But more importantly, we should seize the advantages it presents.
George W. Grayson teaches government at the College of William & Mary. He is author of the monograph "The North American Free Trade Agreement," recently published by the Foreign Policy Association.
by CNB