ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, February 27, 1996 TAG: 9602270075
SECTION: EDITORIAL PAGE: A-5 EDITION: METRO
SOURCE: OLLIE J. AKEL
1996 IS SHAPING up as a pivotal year for the North American Free Trade Agreement.
After playing a key role in helping Mexico turn the corner in its financial crisis and in protecting the U.S.-Mexico trade relationship from many of the possible adverse effects of the devaluation, NAFTA is now being attacked by election-year politics.
It is increasingly clear that certain presidential hopefuls and other protectionists are determined to subject NAFTA and the U.S.- Mexico partnership to increasingly strident attacks in search of political capital.
In the process, they also threaten to endanger the hard-won bipartisan consensus for free trade.
Ultimately, this could affect the United States' willingness to abide by its international legal commitments.
This is bad news for the U.S. private sector and economy, both of which have reaped tremendous benefits from NAFTA.
Citizens and firms in all three NAFTA nations have a lot riding on the successful implementation of NAFTA and the continued commitment - on the part of all members - to this revolutionary agreement.
More than a few experts on the U.S. political scene warn that the United States is already wavering in its commitment to NAFTA, primarily because of election-related pressures.
Reluctance to approve fast-track negotiating authority for NAFTA expansion, and the recent efforts to alter key NAFTA cargo transportation and agricultural-product provisions are just a few of the examples.
One of NAFTA's proven benefits has been its success in ``locking in'' Mexico's commitment to free trade and participation in the international economy.
Despite the most serious economic recession of this century, Mexico did not close its borders to imports and did not impose any new tariffs on imports from its partners in free trade.
While it is convenient for some to cast Mexico as an underdeveloped and unimportant nation, Mexico continues to purchase more U.S. products than any other nation except Canada and Japan.
It is also the single nation through which the United States can unlock the door to free trade with the entire hemisphere.
A Free Trade Area of the Americas would provide enormous additional benefits, increased market access for U.S. firms and, consequently, more U.S. jobs.
NAFTA was negotiated and signed into law in order to overcome special interests in favor of the greater economic good of each country.
It firmly committed its partners to clear standards and a predictable framework for reducing trade barriers, increasing business opportunities and generating new investment throughout North America.
NAFTA has more than proven its value - for the United States, Mexico and Canada. In good times and in bad, the evidence shows that NAFTA is working.
In 1994, NAFTA surpassed all expectations. Trade in North America grew by 17 percent overall to $350 billion. U.S.-Mexico trade grew even faster, by 20.7 percent, reaching the $100 billion mark for the first time ever.
Growth was balanced among all three nations, creating business and job opportunities in each country.
In 1995, the economic crisis stormed over Mexico and rained hard on all business operations and economic sectors.
NAFTA didn't cause the crisis, but it is helping to resolve it.
Mexico's exports, encouraged by NAFTA, grew 31.5 percent in 1995 and contributed to slashing the large current-account deficit that had been a principal cause of the devaluation.
As a result of NAFTA, and in spite of the Mexican crisis, U.S. exports to Mexico remain above their pre-NAFTA levels.
This offers a striking contrast to the trade figures registered following the 1982 crisis, when U.S. exports to Mexico dropped by more than 50 percent and took years to recover.
NAFTA never pretended to eliminate disagreements or trade-related conflicts between member nations. What NAFTA gives us is a solid institutional framework through which we can resolve our conflicts.
Occasional disputes are unavoidable and should not disrupt the agreement or its benefits.
Nonetheless, abrogating a provision of NAFTA to placate a particular domestic sector can set a dangerous precedent and should be avoided.
Unilateral exceptions made for one interest may win temporary favor, but over the long term, exceptions will invite a cascade of other petitions as well as potential retaliation by member countries.
Violating international legal commitments will only further encourage the political opportunists who are trying to whip up anti-NAFTA, protectionist fervor.
1996 is already testing the leadership and ability of the NAFTA nations to implement the agreement and remain firm in their commitments to this historic partnership.
Let's hope our leaders will rise to the challenge of protecting this crucial ingredient for business success, employment growth, sustainable economic prosperity and the viability of the United States' commercial-policy objectives of opening new markets and expanding free trade.
Ollie J. Akel is president of the American Chamber of Commerce of Mexico.
- Knight-Ridder/Tribune
LENGTH: Medium: 98 linesby CNB