European Stars and Stripes (Newspaper) - November 19, 1993, Darmstadt, Hesse                                Page 8 the tars and stripes Trade agreement Friday november 19.1993 Naftal the Praise protest analysis by Martin Cut Sincler a economics writer Washington it was the nation s salvation. Or its sure downfall. In the final orgy of claims before Nakfa s  Sage in the House on wednesday night reality was sometimes left behind. These arc some claims for and against the North american free Trade agreement and what Many analysts believe would be the actual outcome from the pact linking the United states Mexico and can Ada. The House approved it 234-200. Job Impact rep. David e. Bonior d-mich., the Leader of House opponents urged lawmakers to vote against Fortune 500 companies that stood to gain and Side with the unfortunate 500,000 americans who will lose their jobs because of Naftal. On the other hand. President Clinton has claimed that 200,000 jobs will key facts about Naftal be gained Over the next two years because of the pact. Economists generally agree that jobs will be gained in High tech industries and lost in Low tech labor intensive industries. Various studies have picked As winners companies that Deal in computers Tele communications Auto parts machine tools  and petrochemicals. Job losses were predicted or manufacturers of clothing household glassware appliances and Ceramic tiles As Well As growers of vegetables and fresh Cut roses. In any event analysts said the Overall Job Impact was Likely to be Small with the net effect Over five years ranging from a net gain of 200,000 jobs to a net loss of 200,000, a tiny figure in comparison with the 4.9 million net jobs the Economy is forecast to create Over that same period. Wage Impact House majority Leader Richard a. Gephardt d-mo., an other Naftal opponent charged that americans forced to compete with Low paid mexican workers would see their wages depressed and their living Stan Dards decline. Opponents have repeatedly emphasized the wage disparity Between the two countries with american manufacturing workers earning an average of $16.17 an hour compared with $2.35 for their mexican counterparts. However economists say this compari son fails to take into account productivity which is about five times higher for manufacturing workers in the United states. A study by the . International Trade commission concluded that wage rates would Rise in the United states by0.3 percent compared with where they otherwise would be without Naftal atthe end of the 15-year phase in period. However for Mexico it found a much bigger Impact forecasting that at the end of the 15 years mexican wages could Beas much As 16.2 percent  they would be without Naftal. Economic Impact the congressional budget office has discounted claims of an impending Boom or a bust forthe . Economy saying its review of Naftal led it to the single resounding conclusion that the net effect of the . Economy would be positive and  the wefa group a forecasting firm in Bala Cynwyd pa., has projected that the $6.4 trillion . Economy would be 0.6 percent. Larger by 2003 with Afta than without. By contrast it predicted that the mexican Economy would be 15 percent larger because of Naftal ty2003v what it does eliminates tariffs another barriers to the movement of goods services and investment among the United states. Canada and Mexico creating the world s largest and riches trading bloc covering 360 million people. Timing scheduled to take effect Jan. 1. Tariffs Naftal would eliminate some tariffs immediately and phase out others Over five 10 or 15 years. Industries that Are considered the most. Vulnerable would be Given the longest Protection. Mexican tariffs on . Products currently average 10 percent while . Tariffs of mexican products average 4 percent. Investment Mexico would eliminate protectionist regulations that have restricted foreign investment. Profits could be freely taken out of Mexico by . And Canadian firms and investors could not have property seized without full compensation. Agriculture tariffs on All farm products would be phased out but producers would be Given 15 years to adjust to a duty free status on sensitive products. These include com and dry Beans for Mexico and Orange juice concentrate sugar and peanuts for . Farmers. Mexican import licenses which cover about 25 percent of . Exports would be dropped immediately. Telecommunications the treaty provides for rapid Access by . And Canadian firms to Mexico telecommunications Market. Mexico would eliminate the majority of Tariff and no Tariff barriers to its telecommunications equipment Market immediately. The barriers were estimated at $1 billion in 1992. Autos Mexico would open its highly protected Market the fastest growing major Market in the world. Mexico agreed to Cut its 20 percent Tariff on autos to 10percent immediately. To qualify for duty free treatment the North american Content of cars now set at 50 percent would have to reach 62.5percent after eight years this would prevent a country such As Japan fro shipping parts to Mexico Tor Assembly into cars destined for the unite states. Energy Mexico retains the monopoly enjoyed by Lemex its National Oil company on exploration and retail gasoline sales. However modest Progress was made in . And Canadian companies Access to Mexico s electricity petrochemical and Energy service sectors. Financial services Mexico gradually would eliminate restrictions that have severely limited participation in the mexican Market by . And Canadian Banks insurance companies and brokerage houses. Textiles and apparel the United states end Canada for the first time would open their heavily protected textile and apparel sectors to significant Trad Competition with a Large developing country. High tariffs would be phased out Over 10 years. But to receive the Tower tariffs garments would have Tobe Cut and sewn in North America from North american Yam and fabric. Costs Mara would reduce Federal revenues by s3 billion Over five years because of the lowered tariffs that would be partially offset by increasing the current $5 customs fee on overseas travellers to $6.50 an imposing h for the first time on travellers arriving from the Caribbean. Canadians fear deals May hobble their Trade Souter associated press is by the Washington Post Toronto canadians never very fond of the North american free Trade agreement were downright Cranky wednesday Over the fact that congressional votes for Naftal were being secured by possible new Trade protections against Canada. Ontario Premier Bob Rae Leader of Canada s largest province charged that Canadian interests were being sold out in the name of Naftal. It strikes me As absolutely bizarre that. In the name of a free Trade agreement president Clinton would be making All kinds of last minute deals which Stop Canada from having decent free Trade a Cess to the United states Rae said. What he is doing is saying to con Gress i la be a protectionist against Canada in order to get you on my Side for free Trade with Mexico it s completely  across the nation canadians pointed put that Clinton s promises to consider imposing import curbs on Canadian wheat and Canadian Peanut butter to appease wavering legislators were not exactly consistent with free Trade. Apparently Clinton is willing to act like a wet Noodle in order to placate the . Pasta lobby the Toronto Star said in an editorial. It s hard to see Why Ottawa would still proclaim Naftal into Law if the Price of free Trade were pasta protectionism at the  the Canadian parliament has approved Naftal but the new government of prime minister Jean Chretien has not yet taken the final step to make the Accord Law. Ministers in his government generally played Down the wheat and Peanut butter prime minister Jean Chattlen deals but said Chretien will raise numer Ous Trade issues when he meets with Clin ton in Seattle today at the Asia Pacific economic cooperation forum. In both Trade deals Washington has committed itself to imposing limits on Canadian exports within 60 Days if cer Tain conditions Are met. Shipments of Canadian durum wheat used in pasta making have increased sharply in recent years leading to complaints from american Farmers that their prices Are being undercut. Mexican Industrial Center ready to conquer markets Monterrey Mexico a with the House s passage of Naftal Deal makers in this Industrial Center say they Are ready to conquer  is in a privileged economic and geographic position to take advantage of International Trade said Nuevo Leon state gov. Socrates Rizzo. We have at least 10 very important foreign investors that were waiting for passage of the agreement to announce they were coming  Monterrey a free Trade Haven of 3 Mil lion people that is 120 Miles South of the Texas Border has looked to the North american free Trade agreement As a source of Good  elaborating Rizzo said korean japanese and German Auto parts manufacturers were ready to set up shop in Monterrey which used to be known As the Pittsburgh of Mexico for its steel plants and  before the agreement s passage wednesday night by the House Morgan corp., a Pennsylva Nia based maker of trailer truck bodies announced that it was expanding operations to  president Don Griffin said the new Plant with an initial investment of $10 million would employ 250 people and Gross $60 million in annual sales by Selling trailer truck bodies to Mexico starting next year. I think Naftal will make it easy to make business across Borders moving goods across the Border Griffin said in Monterrey on  said the Plant would Export to the United states and can Ada within three years and would buy steel and aluminium from Monterrey  re ready to conquer markets said Enrique Zambrano president of the Mon Terrey chamber of Industry and manufacturing. Mexicans will have to work harder to compete on an International level. And Monterrey will pull the rest of the country said Zambrano who also Heads Gruppo Proenza an agricultural and automotive parts  Ibarra an economist with the Monterrey technological Institute said the government now needed to make it easier for Small and midsize companies hundreds of which have closed in the past two years in Monterrey because of Mexico s economic , Many smaller businesses can t get Loans to modernize or get new technology because of High interest rates at Banks