Conference back40::soapbox

    Terms from the basenote:
    
    NAFTA - the North American Free Trade Agreement.  Negotiated over 
    a lengthy period by three separate administartions (Reagan, Bush,
    Clinton) and signed in 1993 by Canada, the US, and Mexico.  Passed both
    houses of Congress in December 1993.
    
    OAS - Organization of American States; a regional body for
    intergovernmental relations between countries of North, Central and
    South America, founded decades ago; often a paper tiger, sometimes an
    interesting forum for regional leaders.
    
    Mercosur - a customs union/trade agreement among several/most nations
    of South America.
    
    DougO

    During the debate on NAFTA last year, one of the problems we discussed
    was the corrupt political system in Mexico.  In arguing for a closer
    trade relationship despite this, I suggested that it was in Mexico's
    own better interests to clean up their system; I observed that they
    had made some progress in recent years already; and I predicted that
    closer ties would provide them further examples and further economic
    pressures to continue those reforms.  The next two articles discuss
    some of the changes Mexico is dealing with today in these areas.
    
    DougO
    -----
    from today's and yesterday's online editions of the SF Chronicle.
    ----
    Mexico's New Leader Chooses Diverse Cabinet 
    
    
    Mark Fineman 
    
    Mexico City 
    
    President-elect Ernesto Zedillo, promising an era of historic reform
    on the eve of his inauguration, announced a new government yesterday of
    veteran technocrats, hard-line  ruling-party stalwarts, trusted
    personal aides and -- for  the first time in seven decades -- an
    opposition member. 
    
    Dominated by free-market economic reformers, the ``mixed-bag'' cabinet
    of 23 men and three women, most of them younger than 45, is expected to
    have a positive long- term effect on foreign investment and expanding
    trade with the United States under the North American Free Trade
    Agreement. 
    
    The team named by Zedillo, a 42-year-old economist who will take office
    in a daylong celebration today, includes Treasury Secretary Jaime Serra
    Puche and Commerce Secretary Herminio Blanco. Both are veterans in the
    cabinet of outgoing President Carlos Salinas de Gortari and chief
    architects of his radical economic reform policies. Both are well-known
    and respected in the United States for their key role in negotiating
    NAFTA last year. 
    
    But, amid political infighting and unsolved assassinations that
    threaten to tear apart Zedillo's long-governing Institutional
    Revolutionary Party (PRI) from within, the new president also gave a
    key cabinet post to the party's controversial chairman, Ignacio
    Pichardo Pagaza. 
    
    Pichardo was recently accused by Mexico's former deputy attorney
    general of obstructing justice in the unsolved assassination September
    28 of PRI secretary-general Francisco Ruiz Massieu. 
    
    Pichardo was appointed secretary of energy, mines and state industry --
    a key post that includes management of the state's powerful oil
    monopoly, Pemex, and the Federal Electricity Commission. Most analysts
    saw this as an appeasement of PRI hard-liners. 
    
    Other important appointments included: 
    
    -- Jose Angel Gurria as foreign secretary. Gurria is a gregarious
    economist and prominent Zedillo campaign aide who is well-known in
    Washington and other capitals for his role in renegotiating Mexico's
    foreign debt. 
    
    -- General Enrique Cervantes Aguirre as defense minister. Cervantes,
    59, formerly headed the 31st Military Zone in Tuxtla Gutierrez -- the
    division facing the rebel Zapatista National Liberation Army in
    Chiapas. A tenuous cease- fire between government and rebel forces has
    held since January 12. 
    
    In naming Antonio Lozano, a 41-year-old veteran of the leading
    opposition National Action Party, as the nation's top law-enforcement
    official, Zedillo broke a 65- year PRI tradition of naming only
    ruling-party members to the inner circle of government. 
    
    As attorney general, Lozano will take over the controversial, unsolved
    investigations into the assassinations of Ruiz Massieu and of Luis
    Donaldo Colosio, the PRI's popular, reformist presidential candidate,
    in March. Most Mexicans believe both were political murders hatched by
    internal PRI conspiracies. 
    
    That theory was bolstered last week by Ruiz Massieu's brother Mario,
    who, as deputy attorney general, investigated the murder for two months
    before he resigned, alleging that Pichardo was part of a conspiracy to
    cover it up. 
    
    Mario Ruiz Massieu, speaking on a Los Angeles radio program, appeared
    to regard the Lozano appointment as good news. ``Now that there will be
    an impartial investigator, I'm sure that (the facts of the case) will
    all come to light,'' he said. 
    
    Most observers viewed the choice of Lozano as a clear signal by Zedillo
    that he intends to fulfill promises of extensive political reforms,
    which include officially separating the ruling party from the
    government apparatus, reducing the monolithic power of the Mexican
    presidency, separating the judiciary from politics and ushering in a
    new era of political pluralism. 
    
    Respected political analyst Sergio Sarmiento said the appointment of
    Lozano ``really changes the rules of the game.'' 
    
    ``The cabinet shows the thrust of the Zedillo administration --
    continuity of the economic program, depoliticization of the interior
    ministry and the federal district of Mexico City and creating an
    independent judiciary,'' said Fernando Escalante, a sociologist and
    judicial expert at the Colegio de Mexico graduate school in Mexico
    City. 

    Mexico's New President Assumes Power / He vows to fight poverty,
    reform political system 
    
    
    Tim Golden 
    
    Mexico City 
    
    Ernesto Zedillo, a politically inexperienced economist thrust by
    tragedy into the leadership of Mexico's long-governing party, took
    office as president yesterday, promising a new fight against poverty,
    ``definitive'' steps to democracy and sweeping changes in the corrupt
    justice system. 
    
    ``Many have not benefited from the fruits of progress,'' Zedillo, 42,
    said in an inaugural address that was filled with implicit criticism of
    the previous administration's failings. ``Now that we are able to build
    a more prosperous Mexico, we must -- and can -- make it a more just
    Mexico.'' 
    
    Standing before a vast audience of politicians and foreign dignitaries
    in the lower chamber of the congress, Zedillo paid a warm but brief
    tribute to his predecessor and political mentor, Carlos Salinas. Then
    he immediately recalled the assassination that turned him from novice
    campaign manager into candidate. 
    
    Acknowledging widespread dissatisfaction with the government's
    investigations into the murders of Luis Donaldo Colosio, and another
    party leader, Jose Francisco Ruiz Massieu, Zedillo pledged to
    ``significantly intensify'' efforts to solve them. 
    
    He also held out a conciliatory hand to peasant rebels in the southern
    state of Chiapas who have vowed to prevent the scheduled inauguration
    next week of a ruling-party governor whose election they maintain was
    fraudulent. 
    
    Reiterating his call for new peace talks with the rebels, Zedillo said
    the government troops surrounding them will not break the cease-fire
    that has held since January 12. But he also signaled that he will
    reject demands for new elections in Chiapas, insisting that the law
    must be upheld. 
    
    Underscoring the conflicts left unresolved by Zedillo's easy victory in
    the August 21 election, dozens of people were reported injured
    yesterday afternoon when left-wing protesters hurling rocks clashed
    with riot policemen firing tear gas.
    
    The clash came when lines of helmeted police officers blocked thousands
    of demonstrators trying to march to the central square, or Zocalo,
    where Zedillo was greeting well-wishers after being sworn in. A police
    jeep and a truck belonging to the governing party were set on fire by
    the protesters. 
    
    For the most part, however, the occasion was yet another lavish
    exercise in renewal for the party that has dominated Mexican political
    life since its founding in 1929. 
    
    The inaugural drew heads of state from throughout Latin America,
    including Presidents Fidel Castro of Cuba, Alberto Fujimori of Peru and
    Carlos Menem of Argentina. Vice President Al Gore headed the delegation
    from the United States. 
    
    Among the many doubts that have been raised about Zedillo's ability to
    lead a country racked by social tensions and political turmoil, the
    questions of his authority and skill as a politician remain central.
    Despite the enormous challenge Mexico faces in creating millions of new
    jobs, revitalizing small and medium-sized businesses and sharing its
    wealth more equitably, his abilities as an economist -- he is a former
    planning and budget minister -- have gone virtually unquestioned. 
    
    Members of Zedillo's own, deeply divided party have worried that he
    will never wield the extraordinary power that Salinas consolidated in
    the name of change. 
    
    But throughout a campaign largely focused on the authoritarian
    practices rooted in Mexico's one-party past, opposition leaders
    clamored for a greater balance among governmental powers, and Zedillo
    embraced the idea as his own. 
    
    Yesterday, he repeated his campaign vows to end the government's
    traditional support for the Institutional Revolutionary Party, to cede
    budgetary oversight powers to the legislature and to allow greater
    autonomy to state and municipal governments, which were long treated as
    executive pawns. 
    
    In describing a ``definitive reform'' of the political system, Zedillo
    said it must address a series of issues that he had only a few months
    ago described as settled: regulations on political party financing and
    campaign expenditures, fair access to the news media for all parties
    and fuller autonomy for electoral authorities. 
    
    ``Mexico demands a reform which, based on the broadest political
    consensus, will eradicate the suspicion, recrimination and distrust
    that mar the electoral process,'' he said. 
    
    

    Some folks (congressmen, but who can you trust?) attribute 1 company
    a day leaving the US due to NAFTA.  Now we have gatt.  Wow.

    I have only general numbers, but our trade with Mexico has increased by
    huge numbers since NAFTA passed. Our trade with all of Central and
    South America has increased greatly since the passage of NAFTA and
    looks to skyrocket.  Unemplyment in the United States is in the high 5%
    which is close to full emplyment because the way the figure is
    computed.  I think we may loose a number of low wage, common labor type
    jobs, but we are picking up semi skilled, skilled, management, sales
    and professional positions.    
    
    Things are damn good, and getting better.  With GATT kicking in here
    shortly, we are in for one those killer boom ecomomic times.
    
    Can anyone point to a hurting industry right now?  Anything at all?
    
    We work for a giant computer manufacturer/seller/service provider. 
    Every piece of existing computer equipment in the world will probably
    be replaced in the next 10 years.  In addition, every new business will
    need equipment, Every growing business will need additional equipment.
    NAFTA and GATT will help us enjoy a nice large piece of the computer
    pie in next decade.  Have you ever heard the term,"You have to make hay
    while the sun shines"  Well the sun is out and it looks to stay out for
    awhile.  Just be glad your here to enjoy it.  
        

    <--- I agree with your assessment. It would seem that all of the scare
    tactics are just that, scare tactics.

    We are going to open up fair trade arangements with other countries?
    When? We still are having troubles making fair trade work with Japan.
    And tell us, after sinking billions into the oil quest of the 70's...
    and loaning these people major money to have them default in the early
    80's.... thus also driving up interest rates to loan shark levels... We
    are going to get into a fair trade arangment with NAFTA??? When?
    Where?? Get a life folks! It is another gimme for someone else. Nothing
    fair about exporting 30k US made cars to have 70k imported back...
    
    

        according to the labor department:                       
    The net effect of nafta has been the loss of 10,000 jobs.

    Let's see where we are in 5 years.

    re: Let's see where we are in 5 years
    
    Can we afford to find out?  Can we afford not to?  
    We must not forget.  We must hold these people accountable.  If this
    deal turns sour, we need to split, quick. not just continue on business
    as usual.

    Americas Free Trade Goal OKd In Miami 
    / First step will put Chile in NAFTA 
    SF Chronicle 12/12/94
    
    Miami 

    President Clinton and the leaders of 33 Western Hemisphere nations
    concluded a  weekend summit yesterday by signing a free- trade
    agreement that Clinton called ``a watershed in the history of the
    hemisphere.'' 

    The leaders also said they agreed to admit Chile to the North American
    Free  Trade Agreement, a move that clearly puts pressure on the other
    nations of South and Central America to speed the opening of their 
    markets if they want expanded trade with the United States. 

    The announcement came at the conclusion of a surprisingly harmonious
    three-day  summit meeting. 

    Clinton and the other Western Hemisphere leaders -- only Cuba was
    excluded --  agreed to conclude a treaty within a decade to create a
    free-trade zone for the Americas. 

    But Clinton's aides made clear yesterday that they hoped the process
    would  actually be much speedier as countries of South and Central
    America race to reform their economies and to meet a still loosely 
    defined set of requirements to join the year-old pact that is commonly
    known as NAFTA. 

    ``This should be evidence that we intend to accelerate the process'' of 
    eliminating a wide variety of trade barriers that still slow commerce
    across the two continents, Clinton said yesterday. 

    A broader goal is also at work: The administration makes no secret of
    its  efforts to use the prospect of trade liberalization in Latin
    America to put pressure on the European Union and Asian countries --
    where the  United States will have a trade deficit of nearly $100
    billion this year -- to open their own markets. 

    ``The Europeans will be encouraged, to use a delicate word, to be more
    open in a  number of areas we have been concerned about,'' said Mickey
    Kantor, the U.S. trade representative, yesterday. ``And the Asians 
    will also be encouraged to go in this direction, or they, too, will be
    left behind.'' 

    The administration saw reason for celebration yesterday over the speed
    at which  the Latin American countries have become converts to free
    trade after decades of competing for American foreign aid and of
    playing  the United States and the former Soviet Union against each
    other. But the celebration did not drown out some signs of discord. 

    Some human rights and labor groups criticized the administration for
    placing  business first, contending that the communique approved
    yesterday made only vague acknowledgments of the need to protect worker
    rights  and the environment, and said nothing about broader human
    rights issues. 

    Caribbean countries complained that their tiny economies could be
    greatly  damaged by rapid market liberalizations. The prime minister of
    Barbados, Owen Arthur, warned that ``a rising tide can also overturn
    small  boats'' and used the occasion to lecture a surprised- looking
    Clinton about American policy on trade in bananas. 

    The president acknowledged yesterday that the continuing American
    embargo  against Cuba had been criticized by many Latin American
    leaders during private meetings. 

    Several told him that the effort to speed the collapse of Fidel
    Castro's regime  in Cuba and to replace it with a democratically
    elected government would be aided by opening commerce. 

    ``Most of these countries don't agree with the United States policy,''
    Clinton  said, though he showed no inclination to change the American
    position. But he said that there ``was a great deal of feeling that it 
    is urgent to restore democracy to Cuba.'' 

    People have been saying NAFTA has been bad, that results aren't in.
    This is a snippet from an article on Mexican/Californian business
    relations in the wake of Prop 187 in today's Chronicle.
    
    "For the first nine months of this year, the state's exports to Mexico
    reached $5.6 billion, a 15.4 percent increase over the same period
    last year."
    
    DougO 

    This heartening story of Chile's emergence is exactly the point of free
    trade, exactly the reason for GATT and NAFTA, and a lesson for those
    other countries in the region who haven't yet reformed their economies.
    
    DougO
    -----
    After Biting Bullet, Chile Thrives / 
    Offer to join NAFTA is `seal of approval' for economic reform 


    Susan Jackson, Chronicle Foreign Service 

    Santiago, Chile 

    For years, determinedly capitalist Chile spurned economic alliances as
    it  lowered its trade barriers and opened its doors to all imports. Now
    the example it set is  being emulated by much of Latin America. 

    But today's fast-moving and interdependent global economy has prompted
    Chileans  to pursue new ways to maintain their edge. 

    The country pulled off a coup last weekend at the Summit of the
    Americas in  Miami when it was invited to join the North American Free
    Trade Agreement. 

    ``Just the sight of (President Eduardo) Frei standing there with the
    three other  presidents (of NAFTA member nations) is a spectacular
    promotion for our country,'' said  Carlos Ominami, a socialist senator
    and former economy minister. ``It does a lot for  our image abroad and
    brings Chile immediate benefits.'' 

    Under a timetable agreed to in Miami, formal talks on admittance will
    start in  April and Chile will become a full member in mid-1996. 

    Consultant Fernan Ibanez recalled that Chile ``was plunged into deep
    depression  in the early 1980s, in part because it abandoned
    protectionism.'' He said the  invitation to join NAFTA is ``a seal of
    approval'' for the years of sacrifices the country endured  while
    implementing its free-market program. 

    Chile's economy has long since recovered. Expansion has slowed a bit in
    the past  two years, but gross domestic product is growing at an annual
    rate of 6 percent. 

    One of the few countries to have a positive trade balance with the rest
    of the  world, Chile holds international reserves of about $12 billion.
    It boasts a BBB+ credit  rating, the highest in Latin America. 

    For Chile, the prime benefits of NAFTA membership will be increased
    visibility  and affirmation that the country is a safe investment, says
    Ibanez, whose consulting  firm Profinde works with international
    investors. 

    Not that the world has been ignoring Chile of late. Foreigners invested
    $3.6  billion from January through October, up 61 percent from the same
    period last year. 

    Chile's most notable export is wine; last year it exported 87 million
    liters,  ninth in the world. 

    Vina Concha y Toro, the country's leading vintner, is the world's
    third-biggest  wine exporter to the U.S. market, with sales this year
    of around 7.2 million liters.  It raised $53 million in October when it
    became the first Latin American winemaker to issue  American Depository
    Receipts on the New York Stock Exchange. 

    Wineries hope to triple exports over the next three or four years. 

    Other beneficiaries of NAFTA will be the country's fruit exporters and
    its  powerful mining concerns, which be able to import machinery more
    cheaply. 

    ``The world will look at Chile through a different prism'' after NAFTA,
    said  Haroldo Venegas, a director of ASEXMA, a manufacturing exporters'
    association. 

    But he and other experts agree, ``For us, the real market is Latin
    America.'' 

    For that reason, Chile is negotiating to join the Mercosur trade bloc,
    made up  of Argentina, Brazil, Paraguay and Uruguay. 

    When Mercosur was formed in 1990, Chile spurned it. ``Chile's economy
    started  opening in 1975, and by the late 1980s, it had left the
    neighborhood behind and was  operating with world economies,'' Venegas
    said. ``We've known for a long time that  protectionism has terrible
    results.'' 

    But since 1990, trade within Mercosur has more than doubled, surpassing
    $9  billion in 1993 and changing the Chileans' minds. 

    More than two-thirds of Chile's $3 billion of international investments
    are in  Mercosur countries. A strong Mercosur is seen as one of the
    stepping-stones to full  hemispheric economic integration by 2005, the
    goal of the Miami summit. 

    Although Chile's growth rate is the envy of much larger economies, the
    country  does suffer from some disadvantages, especially compared with
    NAFTA's other members:  its small size, lack of economies of scale and
    underdeveloped technology. 

    ``We're faced with the best of the whole world, so we have to be
    competitive to  survive,'' said Andres Goijberg, head of management
    analysis at Madeco, a copper products manufacturer. 

    Advocates for Chile's workers are demanding that the country's
    continued competitiveness not come at their expense. As it is, legal
    protections for  workers are considered to be minimal. 

    Angelica Carvallo, president of a 9,000-member union of private- sector
    workers,  noted that Canada's jobless rate has increased since it
    joined NAFTA and that although  more jobs have been created in Mexico,
    many are under conditions ``of the last  century.'' 

    ``Chile is tiny, and the southernmost country in the world,'' she said.
    ``How  will we be able to get better conditions than Canada and Mexico?
    We have our work cut out for  us.'' 

    I didn't know that Chile was in North America.  How about that, you
    learn something new every day around here...
    
    This kinda sounds like changing the rules after you've agreed
    to play the game.  Would we have bought into NAFTA if we knew
    that it was going to be opened up to include additional countries?
    
    Chris

    As I mentioned in .2, Zedillo is working on anti-corruption measures.
    
    DougO
    -----
    Mexican Senate OKs Court System Reforms / 
    Zedillo's proposal kicks out justices 


    Mexico City 

    The Mexican Senate has approved a controversial proposal by President
    Ernesto  Zedillo to overhaul the country's justice system, officials
    said yesterday. 

    The proposal, approved late Saturday by 108 to 0, would change several
    articles  of the constitution and send all 26 current members of the
    Supreme Court into  retirement. 

    New members of the court will be chosen by the Senate from a list drawn
    up by  the president, a modification of Zedillo's original proposal. 

    Another reform, intended to strengthen the independence of the
    judiciary, would establish a four-year term for the president of the
    Supreme Court, making his  period in office independent of the six-year
    term served by Mexican presidents. 

    Zedillo, who took office December 1, has pledged to reform the
    notoriously  corrupt justice system. He has drawn criticism over his
    proposal, above all for the sweeping way  in which it removes current
    Supreme Court justices. 

    Critics say that rather than reinforcing the court's independence, the
    measure  will allow Zedillo to stack it with justices of his own
    choosing. 

    The proposal was approved with the votes of Zedillo's long-ruling
    Institutional Revolutionary Party and the conservative opposition
    National Action Party. 

    Senators of the center-left Democratic Revolution Party said they did
    not back  the measures and left the Senate before the vote took place. 

    The proposal now goes to the lower house Chamber of Deputies for
    further  discussion. It must also be approved by state legislatures. 

    
    You are going to hear that the Mexican economic implosion is due
    in some way to NAFTA.  Don't believe it.  It is structural, would
    have happened in any case, and there will be more bloodshed and
    refugees.  All these trade agreements are economic sideshows, and
    no economy in as deep trouble as Mexico's is going to be tipped over,
    or be saved, by the weak medicine of trade.
    
    Pesos are cheaper than wallpaper.  You cannot give away Mexican labor,
    yet the internationals (including Digital) are running away in fright.
    Guerillas are shooting randomly in the hills, and the ruling elite
    is clueless.  Very sad sight to see.
    
      bb

    mexicos problems have almost nothing to do with NAFTA. but their
    economy WILL implode in '95. that won't be good for anyone. even a 50
    foot electrical fence on the US boarder won't slow the flood north when
    that happens.

    
    Yesterday, the Mexican stock market crashed and the peso went with it.
    In sympathy, all the other Latin American stock markets plunged,
    except for Chile.  So far, Mexico has borrowed $200 million of the
    $15 billion the USA and Canada have guaranteed.  There are calls for
    the resignation of the Mexican president only months after his
    election.  There is gunfire at night in the far south, but the
    rebels disappear like phantoms when the government patrols...
    
      bb

    
    Yesterday, the multinational Save-the-Peso fund got to $18B, the
    Mexicans had borrowed almost $1B trying to hold at 6, but gave up
    and it tumbled again.  Jesse Helms, opening a generally cordial
    first meeting of the Senate Foreign Relations Committee, called for
    "rethinking" NAFTA, which prompted an outburst from Sydney Weintraub
    and the Chase Manhattan Bank, and a "atta boy, Jesse" from Ross Perot.
    
    What a crock.  As if tinkering with trade agreements could really
    stop an economic implosion on this scale.  There's already been a
    devaluation.  Now there's a real risk of a catastrophic default.
    
      bb

    
    By the way, for all you speculators, you can now buy Mexican
    government bonds bearing a 40% annual interest rate.  No joke.
    
    Any takers ?
    
      bb

    DougO?????
    
    Anyway, look at the bright side.  Mexico is being touted as a super
    travel value these days.  Don't forget to wear one of them condiments.

    
    
     Can we all say "Bailout"????

    >DougO?????
        
    wot?
    
    Oh, you want a comment, since I'm such a free-trade proponent and
    supported NAFTA?
    
    Currencies shouldn't be manipulated.  Mexico has suffered more from
    their currency manipulations (propping the peso up) over the past
    several years, by having it depress their ability to export cheaply, 
    than the institutional investors have in the past month.  Those kinds
    of artificial manipulations are unsustainable in the long run, as
    they've finally found out.  The more they integrate with the world
    economy, the more such unsustainable bad habits will be exposed and
    forced into correction.  Devaluation certainly hurts Mexico more than
    anyone else; at a time when they want to encourage investment, they've
    just scared all of the investors who had the most exposure to them.
    For an example of how this will force other bad habits to be exposed
    and ended, look for them to face huge pressure to privatise Pemex, both
    to generate needed cash and to get the government out of the oil
    industry.
    
    Of course, now that the markets are panicked, and everything is cheap,
    some great deals are to be had.  Don't be surprised to find those who
    recognize that Mexico's underlying attractiveness remains are quietly
    buying everything they can right now.  Don't take bleating from the
    markets as indication that the sharper ones aren't looking hard at some
    great opportunities now.  Sure, investors just took a hit.  So what? 
    They put their money in play, hoping to see great returns, at higher
    risk.  Look for trade, after suffering from the bad exchange rate
    shock, to recover and increase within two years.  
    
    DougO

    
    <-------
    
    Pheeeeeew!!!
    
    Am I glad to hear that!!! 
    
    You don't know how happy it make me to know all will be well and we
    won't have to bail them out to the tune of.. what was the latest
    figure??
    
     Thanks DougO!!!
    

    Them as can prognosticate, do.  Them as can't, hide under the covers
    and wait for the media to tell them what to think.
    
    Which are you, Andy?
    
    DougO

    
    
    Well DougO... I like to think that I've got a pretty level head on my
    shoulders (being Polish non-withstanding)...
    
    Prognosticate? Seems to me there were many assumptions in those
    prognostications.... no? Assumptions that evidently didn't pan out
    (media non-withstanding)...
    
     I'm crushed DougO!!!  :(  Does this mean there will be a bailout??
    
    And if there is,.. seeing it's a NORTH AMERCIAN Free Trade Agreement,
    that means all of the North Americans will be kicking in (where will
    this money come from?).... correct?
    

    Which assumptions didn't 'pan out', Andy?  I said currency shouldn't be
    manipulated, the Mexican Government did and it has cost them dearly. 
    In the first place, they propped it up for so long that their exports
    have been overpriced, hampering the expansion of their economy; and in
    the second place, the government spent nearly all of their foreign
    currency reserves on the policy, leaving them facing bond debt coming
    due and few options to meet it, especially since much of it is
    denominated in those foreign currencies they don't have.  Given the
    lost decade of the 80's (little to no expansion of economies throughout
    Latin America due to the debt crisis) they should have known better.
    Now they've damaged their credibility at a time when they were set to
    begin an expansionary boom based on inward foreign investment; and that
    lost credibility will slow down investment in the Mexican economy for
    some time to come.
    
    On the other hand, the news isn't all bad, and this is the part that
    you don't read in the newspapers.  The dollar is wonderfully strong
    against the peso right now, making tourist dollars stretch a lot
    further.  So a lot more dollars will flow into the Mexican economy,
    into the hands of the tourism service industries, and thence into
    rebuilding government foreign exchange reserves.  Americans will enjoy
    a lot more cheap vacations this year than they otherwise would have.
    Similarly, Mexican imports will now be priced more competitively on
    this side of the border, making them cheaper for American consumers 
    (as PREDICTED throughout the NAFTA debates by our side, remember?) and
    also helping Mexico to build up its export-oriented manufacturing and
    strengthening their economy.  Finally, unless the big investors are so
    spooked by this mishap that they flee the market, the devaluation has
    made now the perfect time to invest in Mexico- every dollar invested
    into Mexico will buy 30% more land or labor than it did two months ago.
    If we get past the 'crisis' in the newspapers stage, then the Mexican
    economy should become even more attractive.  There is plenty of good
    news to the free trader in a devaluation; not least of which it rams
    home to the Mexican government that they shouldn't be messing with the
    fundamentals.
    
    And by the way, talk of a 'bailout' is premature.  The Mexican
    government hasn't defaulted on its bond debts yet; and all that has
    been offered so far is loan guarantees; that isn't even a loan, just
    backing collateral for other creditors.  Such loans will enable them 
    to get past this current cashflow crisis and also enable some strong
    leverage to be put onto them to do things like sell Pemex.  They may
    come out of this scared straighter onto the free-market path than ever;
    and if so, the international investors will find the current climate
    better than it ever was.  This outcome is easily within reach, and if
    loan guarantees can secure it, its worth quite a gamble; trade with
    Mexico could easily surpass a $30B loan guarantee three or four times
    over within the next decade, if we don't let them slide into default
    now.  It is well within the interests of the US to prevent that, to
    prevent yet another lost decade, if possible; trade growth of that
    magnitude would provide millions of US jobs and competitive stimulus to
    our economy. That's no bailout, and people who claim it is are guilty
    of sloppy thinking and an inability to see the fundamentals.  So we'll
    put up a guarantee, Andy; its a lot cheaper now than the foregone jobs
    and economic advantages that will be lost AGAIN, just like they were in
    the 80's, if we let the opportunity slide.
    
    DougO

    
    So DougO.... Did all those problems in your first paragraph arise
    before or after the NAFTA push/signing? Seems our "economists" should
    have seen at least some of it coming and warned the powers to be...
    Naaahhh... then that would have been newspaper hype.... right?
    
      As for your second paragraph.... Lot's of rosey assumptions there,
    and we'll have to wait and see... won't we?
    

    
      Mexico ought to have something like our Federal Reserve Board.
    
      bb

    > Did all those problems in your first paragraph arise before or after
    > the NAFTA push/signing?
    
    Mexico's support of the peso has long been known, its been the policy
    for more than four years, since the economic reforms begun by the
    previous administration.  The lengths to which they were willing to go
    to defend the peso against speculators were of course unknown until
    push came to shove and they were unable to afford to throw any more
    foreign exchange currency at it; they devalued when they had less then
    two months' reserves left.  That mainly happened in October and November
    of '94, a year after NAFTA; I think they spent more than seven months'
    accumulation of foreign exchange currency in less than six weeks.  So, 
    the answer is, both; the policy predates the NAFTA debate in Congress;
    the currency-speculator induced crisis (the propped-up currency was
    vulnerable) and forced devaluation came long after.  What's the point
    of your question?  Do you understand the rudiments of why they propped
    up the currency in the first place, what tradeoffs they were making? 
    It was not a scheme to defraud investors, it was an attempt to ensure
    stability and control inflation, which policies in fact attract investors. 
    But they took it too far.
    
    > Seems our "economists" should have seen at least some of it coming 
    > and warned the powers to be... Naaahhh... then that would have been
    > newspaper hype.... right?
    
    The dismal science is not infallible.  The US would otherwise have had
    no recession a few years ago, no budget deficit now, and no stagflation
    in the 70's.  The economy is incredibly complex, policy is an imprecise
    tool, and without even a grounding in the fundamentals you think that
    our economists "should have known" that Mexico's currency was over-
    valued and that the Mexican government would compound the mistake by
    going to absurd lengths in pursuit of its policy.  Sorry, but
    predicting that other governments are going to follow sensible policies
    is not what our economists are good at.  Some, indeed, did include
    concerns about the methods that Sedillo government was using to control
    inflation; but that is only one of several policies that were all
    relevant to our evaluation of their situation.  All you can do is
    identify what's going on as best you can, and develop policies to
    address the problems and hopefully not choke off expansion in the
    effort to control inflation, and hopefully not overheat the economy and
    cause an inflationary spiral and inevitable recession by leaning too
    far the other way.  They didn't see the particular hole they fell into
    in time, and nor did we.  That isn't a conspiracy; its a mistake.  
    
    > As for your second paragraph.... Lot's of rosey assumptions there,
    > and we'll have to wait and see... won't we?
    
    Like I said, you figure out as best you can what's really going on, and
    develop policy to address the problems.  One can, if one has been
    paying attention, recognize clearly the dangers of refusing to assist
    their cashflow problems; we could lose another decade, and frankly, if we
    do that, the illegal immigration problems will get far worse.  It will
    be far cheaper for us in the medium and long term to get help Mexico
    get out of its rut, and become a profitable country with a healthy
    economy.  As long as they aren't, our border problems will get worse.
    A $30B loan guarantee is a bargain, if it works.
    
    Some ostriches will no doubt scream 'bailout'; I saw them on C-SPAN.
    Don't believe them for a minute.
    
    DougO

    It's not often I agree with DougO :-) but let's face it folks, NAFTA
    had a lot of support on both sides of the aisle; LOT'S of pols should
    have seen this coming.
    
    If we agree to prop them up again, I'd like to see some strings tied
    to the agreement to do so, tied with very strong twine.
    
    IMHO Mexican government is still rotten to the core and unless/until
    the corrupt are driven out, that sucking sound will increase to a
    deafening roar.  It's for darn sure the average Mexican citizen isn't
    seeing much benefit; where's the money going?
    
      

    Please put discussions about loan guarantees to Mexico in this topic,
    not the one on the Balanced Budget Amendment.
    
    Current news:  Clinton, after recognizing the lack of congressional
    gumption to bite the bullet, bypassed them and put together a loan-
    guarantee program of slightly smaller size ($17.5B) while the IMF has
    increased its committment from $7.8B to around $17B.  The peso and the
    markets affected by trading in Mexican securities have stabilized, now
    that markets have recognized that Clinton understands the importance of
    stability in our third-largest trading partner even if Congress won't.
    The loan guarantees (not loans, not bailouts) will ensure the Mexican
    government's ability to sell its own bonds to cover its short-term cash
    flow problems.  
    
    DougO

    	We shouldn't be bailing out Mexico.  Period.  Historically
    	Mexico and the rest of Latin America have had an atrocious
    	record (if any!) of loan repayments.  I've read somewhere that
    	these countries have NEVER repaid their loans, and it was
    	clearly repeated throughout the book (How To Survive The Next
    	Great Depression), but I'm not yet willing to accept something
    	as extreme as NEVER right now.  Nonetheless, I *am* willing to
    	accept the suggestion that these current loans are as good as
    	outright grants, and we shouldn't be doing that.

    Personaaly, I believe it needs to be driven by Wall Street and not the
    taxpayer.
    
    However, one has to ask, if we don't forfeit 17 billion to bail out
    Mexico, would we lose potentially more money in the future through the
    possibilities of NAFTA?
    
    Consider the government bailed out Chrysler in the 70's.  I believe it
    was out of the role of government but now we have benefitted as far as 
    jobs and automobile ingenuity.
    
    -Jack

    We *aren't* 'bailing out' Mexico.  Loan guarantees are like being
    co-signer; they don't cost us a penny unless the loan goes into
    default.  This point has been made THREE times already.
    
    And while their economy isn't perfect, the economic reforms they've
    already instituted have improved their fundamentals much in recent
    years; and further reforms are underway.  If they get past their
    short-term cash flow problem, they'll be fine.  If they don't...well,
    then losses already sustained by US investors will be worsened; the
    peso will see further losses in value; US jobs building goods to sell 
    into a booming Mexican economy will be lost; the bond markets will tank
    Mexican debt again; and we'll see ANOTHER decade lost, another decade
    with Mexico being a poor country with no money for investments and all
    the associated problems that causes with illegal immigrants.
    
    I'd rather risk a few billion now co-signing their bond debts than risk
    thousands of jobs, millions in lost business, and billions in border
    guards over the next decade.  Clinton is obviously a lot smarter and
    braver than the Congress to step in and do the right thing now, even
    though your average American imbecile still thinks Chrysler got loans
    (they too got loan guarantee, just like Mexico will) and still thinks
    we're "bailing out" Mexico.  Too bad for him; unless he goes out and
    makes a very strong public defense of his policy, the dittoheads will
    misrepresent this credible and responsible response to the situation.
    As we can see in this very note.
    
    DougO

>    co-signer; they don't cost us a penny unless the loan goes into
>    default.  This point has been made THREE times already.
    
    	Default is a highly likely scenario.
    
    	And we may as well just write off them now because Mexico
    	has a terrible track record of paying off loans.
    
>    And while their economy isn't perfect, the economic reforms they've
>    already instituted have improved their fundamentals much in recent
>    years; 
    
    	The most recent years would disagree with this claim.
    
>    peso will see further losses in value; US jobs building goods to sell 
>    into a booming Mexican economy will be lost; the bond markets will tank
>    Mexican debt again; and we'll see ANOTHER decade lost, another decade
>    with Mexico being a poor country with no money for investments and all
>    the associated problems that causes with illegal immigrants.
    
	Why don't we just annex them?
        
>    I'd rather risk a few billion now co-signing their bond debts than risk
>    thousands of jobs, millions in lost business, and billions in border
>    guards over the next decade.  
    
    	Why don't we just annex them?
    
>    Clinton is obviously a lot smarter and
>    braver than the Congress to step in and do the right thing now, even
>    though your average American imbecile still thinks Chrysler got loans
>    (they too got loan guarantee, just like Mexico will) and still thinks
>    we're "bailing out" Mexico.  Too bad for him; unless he goes out and
>    makes a very strong public defense of his policy, the dittoheads will
>    misrepresent this credible and responsible response to the situation.
>    As we can see in this very note.
    
    	Name calling doesn't make your argument any more valid, and may
    	just do the opposite.

    "Bailing out", "propping up"; call it what you may because its just
    words. The point is that the good ol' U.S. of A is risking billions to
    save their bacon!
     

I'm not so sure that annexing them is any great deal, either.

The fact of the matter is that they _will_ default. They are
quite comfortably at this moment chuckling under their serapes
as they tip their sombreros to El President Clinton and
Senor Greenspan.

Tell me how the bankers don't run everything.

 Wish somebody would have bailed me out when I "guaranteed" a loan to my
 son..he defaulted, I got stuck for ~$7000.  Unlike Bill, et al, I've learned
 not to do that again..



Jim

    So you'd rather see a worldwide economic collapse begin as soon as
    possible then because your son was bad with money?

    The metaphor doesn't work for me.

    Glenn

    
    
    	I hardly think anyone in here is capable of predicting a world wide
    economic collapse....
    
    

    Clinton's doing the right thing. Congress would do it, but are wary the
    democrats would try to make hay out of an unpopular "bailout", which of
    course they would. So they are forcing Clinton to be point man for the
    policy, which is shrewd. The republican leaders in congress have said
    they are not opposed to the guarantees, but simply want to see evidence
    of leadership by the white house, and strong support by democrats in
    congress. It's terribly unfortunate that there has to be such CYA, but
    this is the reality of american politics.

    DougO:
    
    What's a dittohead?

    re: .32
    
    
    Oops...I started a Mexico bailout topic.  I guess I should have
    completed my <next unseen)'ing scan throgh the box.  I'm a bit behind,
    you know.  8^)
    
    -steve

    re: .40
    
    I don't think Mexico could trigger a world-wide economic collapse. 
    However, if we keep guaranteeing stupid loans and keep running up our
    own debt, the US quite possibly could.  I sometimes wonder if this
    is all happening according to some plan.  There are too many
    curiosities in our current situation.
    
    -steve

    
    
    Where is Canada in all these guarantees???
    
    It is N A FTA after all.. isn't it?
    

  According to the Boston Globe, when Congress balked at Clinton's $40 million
plan he went with another plan that involved using $20 million of money that
he can spend at his discretion without Congress while he's arranging for the
rest to come from other countries.

  It's a safe bet that Canada is one of those countries.

  George

re .47:

Billion with a "b."

    That's a lot for Canada.

Not so much.  It's just Canadian dollars.

    I think it's American dollars we're contributing.

    
    You got that right!!!
    

    Were there any doubts?

    >Clinton's doing the right thing.
    
    you noticed!
    
    >Congress would do it, 
    
    what *are* you smoking?
    
    > but are wary the democrats would try to make hay out of an unpopular
    > "bailout", which of course they would. So they are forcing Clinton to
    > be point man for the policy, which is shrewd. The republican leaders in
    > congress have said they are not opposed to the guarantees, but simply
    > want to see evidence of leadership by the white house, and strong
    > support by democrats in congress. 
    
    I see.  Politicking instead of doing the right thing.  With majorities
    in both houses.
    
    Seems to me like the GOP has got a LOT to learn about leadership.
    
    > It's terribly unfortunate that there has to be such CYA, but this 
    > is the reality of american politics.
    
    This is the reality of the GOP 'leading' Congress.  They got end-run.
    Seriously, Mark, this is a failure of the leadership they promised.
    Step up to the plate and admit it.
    
    DougO

RE: Dougo,
 
>   This is the reality of the GOP 'leading' Congress.  They got end-run.
 >   Seriously, Mark, this is a failure of the leadership they promised.
 >   Step up to the plate and admit it.
 
How do you figure? Polls show 70% of the populace did not support the $40B
bailout. Facing that kind of rejection the Repubs did exactly what they
should have done. If Clinton does not have the support of his own party
or the people then he is on his own.

It was nice to see him 'lead' for a change. If I didn't know better I'd say
that he is almost acting like the President of the USA. A refreshing change
from being embarrased for him.


Your comments on Repub leadership are rediculous ...

Doug.

    
    Okay DougO.... let's see you prognosticate a bit...
    
    
    What if this latest bailout doesn't work?
    
    
    What then?
    

    >>this is a failure of the leadership they promised.
    >
    >How do you figure? Polls show 70% of the populace did not support
    
    Leadership means doing what is right even if it is politically
    unpopular, then making your case and convincing the public you were
    right.  The GOP leadership clearly failed this test.  Clinton hasn't
    yet, though he may yet fail on the public convincing bit.
    
    DougO

    >What if this latest bailout doesn't work?
    >
    >
    >    What then?
    
    Well, that's pretty clear, isn't it?  If Mexico can't raise money by
    selling bonds, they'll be trying to accomplish several difficult
    measures without adequate finance.  They've balanced their budget,
    they're trying to reform the corrupt political system (strange how
    nobody in here has even mentioned the riots in Tabasco or the PRI
    governor problems there and in Chiapas) and they're trying to change
    their economy to promote investment, build infrastructure and industry,
    and improve the standard of living.  These are all very worthy goals
    and will make them a far better neighbor for us.  But without adequate
    finance they'll be stuck; private inward direct investment will be far
    more cautious and hence less business investment will take place; ditto
    that for infrastructure; and private savings in Mexico is completely
    inadequate to the task.  They'll be stuck with huge potential and no
    way to finance the building necessary to develop it.  They'll lose
    another decade.  US businesses will lose a huge new consumer market,
    and a huge new infrastructure market (construction, materials, tools,
    cement, pipes, electrical wire, etc, etc, etc); if they don't build it,
    we can't make money helping them build it which we otherwise would. 
    That costs us jobs, too.  And the last result: (not the first,
    Delbalso, but the last:) is that with that as the status quo, other
    status quo problems will remain with us- like illegal immigration.
    
    DougO

    
    But the GOP leadership DID support the Prex on it.  (And so did the
    minority leaders.)
    
    So what ?  You cannot pass ANY 40 gigabuck appropriation through
    Congress in less than 2-3 weeks.  The Prex withdrew it because the
    leadership told him it would take time.
    
    Surprise !  Newt can no more put his Republicans through close-order
    drill than Clinton or Gephart can the Democrats.  Sure, he's got them
    goose-stepping through the "Contract" items, but wait till something
    they don't agree on (like school prayer or abortion) comes up.  The
    Republican unanimity will dissolve.
    
    Mexico is a hard sell.  They want 200-300 bucks a head from Americans.
    The leadership did the best they could.  Clinton could have made the
    case in the State of the Union.  Did he ?  Nope - a throwaway line in
    a smorgasbord address was all.  He could have made the case later.
    
    He did it by executive because that was the only way to do it fast
    enough, no matter what the congressional leadership did.
    
      bb

>				And the last result: (not the first,
>    Delbalso, but the last:) is that with that as the status quo, other
>    status quo problems will remain with us- like illegal immigration.

I'm not really sure why you chose to bring this back around to me, other
than that perhaps you misunderstood who you were replying to to begin with,
DougO, but I'll repeat my contention that a hungry under/unpaid Mexican is
not by default destined to be a burden on The USofA. There are plenty of
ways to keep them out. Arming the border would be a good start, especially
as you liberals are continually harping on our bloated military machine.
Keeping illegal aliens on their own side of the border might make a nice
use of their time and energies.

    I brought it back to you because in the other topic where this
    discussion is ongoing that was the single point from a complex
    set of related factors to which you chose to respond; ie, you
    deserved it.  And nobody doubts that there are ways to 'deal'
    with the threat of illegal immigration; but I claim the relative
    cost-effectiveness of those various ways should be examined.  It
    is quite clear that helping Mexico to develop its economy is by
    far the most effective way to remove the causes of that immigration.
    That some would rather spend billions on police-state bandaids to 
    treat the symptom rather than the cause is not news to me, but is
    simply not justifiable on grounds of cost alone, since a better
    solution is possible.  Unless we squander the opportunity, let
    them default, and waste another decade, of course.
    
    DougO

>    That some would rather spend billions on police-state bandaids to 
>    treat the symptom rather than the cause is not news to me, but is
>    simply not justifiable on grounds of cost alone, since a better
>    solution is possible.

I'm not convinced that an armed border would be either less effective
or more costly than a bailout. As the liberals continually point out,
we have the military in place doing nothing already. I don't find
"international welfare" to be a better solution. It's their problem.
Let them solve it. A fine lesson in attaining self-sufficiency, not
to mention a good one in the value of bodily appendages, should we
arm the border.

� :^)

And if you'll note, I haven't, anywhere in either of these discussions
said that the $40B shouldn't be put up. What I've said is that it shouldn't
have been put up without some sort of risk on the part of Mexico, specifically
the denationalization of their oil industry.

    I agree with the tie-in to the privatisation of Pemex and guarantees on
    further economic reforms.  
    
    > I'm not convinced that an armed border would be either less effective
    > or more costly than a bailout.
    
    Hasn't the multibilliondollar failure of the War on Some Drugs already
    demonstrated the ineffectiveness of the US trying to use police state
    solutions against market forces?  If you don't see it already, nothing
    I say here will convince you, so we'll just have to agree to disagree.
    
    DougO

    2000+ miles of border:
    
    10K soldiers per 12 hour shift to be at on soldier every 1/5 of a mile. 
    figure 200-400 desperate people on the other side doing the "border
    dash" in one sp[ot, and that soldier will be overwhelmed.   How much
    are we willing to spend to have a solidly armed border?
    
    

    
    <--------
    
    20 billion???
    

    <--- considering that these men's salaries are already in the current
    budget, it would cost us very little

    <--- You could have had a great sucking sound snarf.

    > <--- considering that these men's salaries are already in the current
    >    budget, it would cost us very little
     
    That's simply inadequate budgeting.  The salaries are in the budget
    against defensive need, currently projected by the Pentagon as a
    requirement to fight two major wars simultaneously.  This does not
    include the budget to set up a 2000-mile border interdiction operation
    continuously for the next decade, or do you think its appropriate to
    pull 300,000 men off the border next time we deploy a Desert Storm
    sized force?  The force is not structured to be deployed on the borders
    one week and anywhere in the world the next.  That will cost a LOT
    more.
    
    DougO

    
    <----------
    20 billion??
    

    maybe for one year.  Over a decade that's $200B, and you gotta add
    inflation in.  And the problem will STILL EXIST.  Mexico's problems
    won't go away.  Status quo solves nothing, militarising our border
    solves NOTHING.
    
    Helping Mexico with a short-term cash flow problem now, helping them 
    to build a vibrant economy and to become a strong trade partner for us
    in the long run, seems like a much more cost-effective approach to the
    problem to me.  A decade from now, they COULD be that; a decade from
    now, we may have millions more in jobs and billions more in trade flows
    on both sides of the border, have we the foresight to take the risk.
    
    DougO

    
    
    RE: .73   Cool!!!  That would be an algebraic equasion!  I can do it! 
    :*)
    
    
    
    
    
    Terrie
    

FWIW

* America's Future, Inc. * Behind The Headlines * March 1995 *


                        JOBS AND MONEY GOING SOUTH
                        ==========================

  Critics of NAFTA - the North American Free Trade Agreement - are saying 
"We told you so." In the first year, the U.S. reportedly suffered a net 
loss of 10,000 jobs. And Mexico's peso crisis may hurt even more. 

  Perhaps the Clinton Administration just didn't get it, to use an over-
worked phrase. Even as it was piecing together a costly and unpopular 
bailout for the Mexican economy, the White House was celebrating NAFTA's 
first anniversary with claims that it had created 100,000 jobs in the U.S. 
It was true that in 1994 U.S. exports to Mexico jumped 20% over those of 
1993. But what the Administration failed to say was that imports from 
Mexico grew even faster than U.S. exports. As a result, according to the 
Joint Economic Committee of Congress, NAFTA has caused a net loss of 
10,000 jobs. And the crash of the peso will only worsen this trend as 
U.S. goods become too costly for most Mexican consumers. 
  
  As of early this year, more than 36,000 American workers had filed 
claims that they lost their jobs because of NAFTA, and the Labor Depart-
ment reported that the number of claims was increasing rapidly. Meantime, 
the Federal Reserve Bank of Dallas reported that the drastic devaluation 
of the peso and the accompanying sharp drop in the purchasing power of 
Mexican consumers will cost another 20,000 to 30,000 U.S. jobs. The 
potential is for much greater losses. The Administration has estimated 
that as many as 700,000 American jobs are now linked to exports to Mexico. 
And the WEFA Group, a Philadelphia forecasting firm, sees the disappearance 
of $21 billion in U.S. exports with the loss of 500,000 jobs, as peso-poor 
Mexicans are forced to curtail sharply their purchase of American products.
  
  But statistics don't tell the whole story. A survey by Sarah Anderson 
and John Cavanagh of the Institute for Policy Studies has revealed some of 
the depressing human costs. In a study titled "NAFTA's First Year: Lessons 
for the Hemisphere," excerpts from which appeared in the New York Times, 
the two economists interviewed a number of U.S. workers who lost their 
jobs. In Woolrich, Pennsylvania, Jean Breining was one of 450 employees 
laid off by a sportswear manufacturer and replaced by workers in Mexico
making an average of $1 an hour. Ms. Breining, who had worked for the 
company for 24 years, qualifies for a government retraining program - but 
retraining for what? Now 59, she sees little prospect of finding another 
half-way comparable job.
  
  In Huntington, Indiana, Tracy Bartrom, a maintenance worker for an 
electrical equipment company, was among 70 employees who lost their jobs 
when the company moved to Matamoros, Mexico. Their replacements earn about 
$8 a day, under decidedly unhealthy working conditions. As Anderson and 
Cavanagh reported, "Mexico's low wages and lax enforcement of workers' 
rights and environmental standards are primary attractions for U.S. 
investors. A random survey of U.S. factories in Mexico in 1992 by the
General Accounting Office found that all violated Mexico's environmental 
laws."
  
  In yet another example of NAFTA's effects, a large tomato growing and 
processing plant in Immokalee, Florida, declared bankruptcy last October, 
citing increased imports of duty-free Mexican tomatoes. Suddenly, 1,100 of 
the Florida company's field and factory workers were out of jobs. According 
to the Institute for Agriculture and Trade Policy, a research group, 
"imports of cheaper tomatoes into the U.S. have increased 25% since NAFTA 
took effect, while the prices U.S. producers received for their crops were 
only half of the 1993 prices."
  
  Citing the failed promises of NAFTA, 24 members of the U.S. House of 
Representatives have introduced a bill calling for the U.S. to withdraw 
from the agreement. And a number of politicians and citizens' groups in 
Mexico are asking for renegotiation of the accord to correct what they 
consider NAFTA's inequities on their side of the border. As economists 
Anderson and Cavanagh concluded, "The continuing crisis in Mexico may yet 
offer the Administration an opening to set new rules that will help not 
only American workers but their counterparts across the border."
  
  At least one private, Washington-based group would go further. The 
American Coalition for Competitive Trade, or ACCT, is planning legal 
action in the courts to have NAFTA, as well as U.S. adherence to the 
newly-enacted World Trade Organization, declared unconstitutional.

---------------------------------------------------------------------------
Behind the Headlines, written by Philip C. Clarke, is a syndicated column 
distributed by America's Future. It is available to interested newspapers 
and other publications on a gratis basis as a service of this non-profit 
educational organization. For more information, please write or call Mr. 
John Wetzel, c/o America's Future Inc., P.O. Box 1625, Milford, Pa. 18337 
(717) 296-2800.

     ===================================================================
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      And in related news, America's trade deficit soared last year by
     50%, to over $150 gigabucks.  Particularly huge were far East
     country trade deficits - Korea, China, Taiwan, Singapore, etc.
    
      No wonder the dollar is weak.  It wouldn't suprise me if there
     is a move to supplant it as the world's reserve currency.
    
      Nobody in either political party has a clue of a policy to touch
     the trade deficit.  If this keeps up, it will be inflationary
     as well.
    
      bb

  I thought that people were saying all along that the short term effect would
be a loss of jobs to Mexico but there would be a long term benefit.

  And I'm curious, why no word of Canada? Don't suppose it could be anything
to do with the fact that Canada can't be used to bash Clinton.

  George

>  And I'm curious, why no word of Canada?

They've got all they can do to keep track of Glenn et. al.

>  And I'm curious, why no word of Canada?

Here's one: eh?

re: .-1

<bravo!>

  In other words I'm right, people only complain when Clinton looks bad.

  Creating a free trade zone with Canada is a good idea so we don't talk about
that.

  Short term losses of jobs were expected, but talking about that doesn't make
Clinton look bad so we don't talk about that either.

  George

  You might want to add something about how we will all be so much better off
if would only we lower the tax on the rich who will then find it in their
hearts to stimulate the economy by giving the rest of us jobs. 

  George

    
    Giant sucking sound...  bb

    Read this.  Check sources, formulate an opinion.  Then bitch about
    the source(s).
    
    
FWIW

NAFTA'S AMEN CORNER: AN UPDATE
==============================
By Jeffrey Tucker

The Nafta "debate" was hardly that at all.  The treaty text - the 
blueprint for North America's Maastricht - didn't appear until very 
late.  A handful of smart economists read the text, and concluded it was 
an unwise political and financial merger, not free trade.  Assorted 
groups of populists, greens, and unionists opposed the treaty too, on the 
value grounds that Nafta had the feel of an insider deal.

On the other side, big government, big media, big banks, big thinktanks, 
and big business joined up to demand Nafta be passed on schedule.  
Arguments were all over the ideological map.  That the Clinton White 
House supported it didn't stop the Republican leadership from proclaiming 
its glories.  The Wall Street Journal was just as passionately pro-Nafta 
as the New York Times.  The supporters' bottom-line message was that 
every respectable source likes Nafta, ergo, you're a kook if you don't.

These respectable sources weren't above hurling mud at their enemies.  
They ridiculed and condemned anyone who raised questions about Nafta.  
Nafta opponents were "protectionists," "reactionaries," "bigots," or in 
the pay of them.  The episode fit the tried-and-true model of wartime 
government propaganda.

Nafta passed, Mexico's Potemkim village evaporated, and then disaster 
struck.  The peso was devalued, investment in Mexico dried up, and Mexico 
hurled itself into financial crisis.  Where to turn?  Where else?  U.S. 
taxpayers were looted to the tune of $52 billion.  Yet the Naftacrats 
have since tried to sweep history under the poncho.  Nafta?  What Nafta?  
Don't look for the Naftacrats to remind us of how wrong they were.

According to President Clinton, "the peso would become stronger if Nafta 
passes because it would strengthen the Mexican economy."  Mickey Kantor 
said Nafta will mean "greater Mexican prosperity and stability.  If Nafta 
is rejected, all that is lost."  On national television, Albert Gore 
ridiculed Ross Perot's predictions and argued that his credibility is 
shot.  Is Gore's credibility shot now?

In Congress, both sides trumpeted the treaty, even people who should have 
known better.  Richard Armey, now Majority Leader in the House, predicted 
that passage of Nafta would mean "the U.S. will be in on the ground floor 
of what promises to be one of the fast-growing 'Latin Lions' of the 
future" - except that the Lion mauled us.  Passing Nafta, he said, will 
"prevent current investors and lenders from pulling their funds out of 
Mexico, which would seriously harm that economy and perhaps create a new 
debt crisis."

D.C.'s thinktanks took the government's line on Nafta as well.  Jerry 
Taylor of the Cato Institute concluded his report endorsing the treaty: 
"the benefits of Nafta are substantial, and any honest examination of the 
treaty finds that Nafta liberalizes trade and generates economic growth 
in all participating countries."

If we don't pass Nafta, wrote Delal Baer of the Center for Strategic and 
International Studies, it would be "like an enormous rock dropped into a 
pond with the United States at ground zero."  But the only rock that 
dropped was the post-Nafta peso.  The day before the devaluation, Baer 
praised Mexico's leadership for building "a platform for renewed 
confidence and coninued growth."

The Heritage Foundation, citing Democratic Senator Bill Bradley, warned 
that "if Nafta is rejected, there will be the immediate problem of $40 
billion in flight capital leaving Mexico in a matter of weeks, probably 
during the middle of the Mexican presidential campaign."  No.  We had to 
wait for Nafta for that to happen.

Paul Beckner of Citizens for a Sound Economy said "with the reforms of 
President Salinas," Mexico "seems destined to join its two northern 
neighbors as a wealthy and modern nation."  Salinas, of course, flipped 
his lid, went on a one-day hunger strike, and fled the country.  "With 
Nafta," Beckner argued, "Mexican and foreign investors will feel 
confident to invest in Mexico, keeping the Mexican economy booming."

But prosperity does not require a con game.  It requires certain concrete 
institutions, like free markets, sound money, contract enforcement, and 
savings.  When they are established, confidence follows.

No one matched Alan Reynolds of the Hudson Institute for bluster and 
faux-certitude.  Rejecting the treaty "would pose an immediate threat to 
U.S. manufacturing," he wrote, and "jeopardize the wealth of many 
Americans, because U.S. mutual funds and pension funds have invested in 
Mexican stock and Treasury bills."  Oddly this same rationale was used to 
justify looting the American taxpayer to prop up Goldman Sachs after the 
peso plummeted.

The long stream of press releases from the well-funded "Nafta Network" 
provides an ex post chronicle of lousy predictions.  Michael Walker and 
Steven Globerman of the Fraser Institute said that Nafta "offers economic 
development opportunities and immediate gains in welfare," as well as 
"great hope" for "the future social and economic well-being of the 
hemisphere."

Also in the "Nafta Network" was Rogelio Ramirez De la O, the publisher of 
the Economic Report on Mexico.  He predicted that Nafta would "raise 
incomes immediately," "foster restructuring of economic activity," and 
generate "high growth and capital formation."  In fact, you had to be a 
member of the Zedillo administration to get those benefits.

Columnists willing to echo the White House achieved instant fame.  Tony 
Snow said "Nafta would force Mexico to liberalize its economy and promote 
democracy" - exactly the opposite of what's happened.  Snow - in just one 
column - accused Nafta's opponents of "fatalism," "fantasy," "bigotry," 
"jingoism," "Know Nothingism," and believing that "America's greatness 
comes from its bloodlines."

Stephen Chapman was gung-ho for Nafta's central planning, and ridiculed 
all critics.  "Rejecting Nafta because it falls short of perfection,"  he 
said, "is like spurning Cindy Crawford because she has a mole on her 
lip."  One problem: Nafta's mole was malignant.  William Rusher - Did he 
bother to read the treaty? - concluded "the benefits of Nafta vastly 
outweigh minor objections to it."

Much of this rhetoric was made in Mexico.  A full-page ad in the 
Washington Post claimed: "Modern Mexico has made 30 years of progress in 
the last five years alone: building a strong, growing economy; reforming 
its laws and institutions; providing new schools, hospitals, and health 
centers for its communities."

It's wonderful what credit expansion and debt will do for an economy - in 
the short term.  Even worse, supply-side writer Jude Wanniski claimed 
that Mexico's "debt pyramid" is "built on honor and integrity, and is as 
solid as the pyramids of Egypt"!

Above the fray stood the one and only David Rockefeller.  He wrote in the 
Wall Street Journal: "Everything is in place - after 500 years - to build 
a true 'new world' in the Western Hemisphere."  And what happens if we 
don't pass Nafta?  "I truly don't think that 'criminal' would be too 
strong a word" for "rejecting Nafta."

But it wasn't "criminal" when Robert Rubin, once and probably future head 
of Goldman Sachs, stole billions from the U.S. Treasury to benefit New 
York investment bankers.  It wasn't criminal when the Republican 
leadership helped the White House unconstitutionally bypass Congress to 
bail out Mexico.  It wasn't criminal when the White House refused to give 
an accounting of its actions in the days leading up to the peso devaluation.

Such issues have deepened the fault lines in the American political 
landscape, and not all the results are good.  Some people are blaming 
free trade itself for the economic catastrophe that followed Nafta.  This 
is the reverse of the prediction of Cato's Brink Lindsey: "if Nafta is 
voted down in Congress, politicians are going to run away from free trade 
as though it's radioactive."  If the Nafta pushers had been honest and 
admitted that the treaty had nothing to do with free trade, then real 
free trade wouldn't have suffered this setback.

Mexican debacle or not, the environmental side accord - the dangers of 
which were dismissed by this crowd - is still working its mischief.  
Eight powerful environmental lobbies have petitioned Nafta's bureaucracy 
to overrule Congress's plans to loosen logging restrictions.  "Suspending 
all environmental laws for federal timber sales is a clear violation" of 
Nafta, they say, and they're probably right.

Not all of Nafta's proponents are in hiding, however.  Gary Hufbauer of 
the Institute for International Economics has owned up to his mistakes.  
He had predicted that the treaty would create 130,000 jobs in America, a 
figure cited by every respectable source.  Today Hufbauer says: "the jobs 
effect of Nafta is approximately zero" and the "lesson for me is to stay 
away from job forecasting."

The lesson for everyone else is to be skeptical when the government 
claims it has a central plan to bring prosperity and joy to an entire 
hemisphere, and all we have to give up is money, power, and freedom.

[end]

Source: The Free Market (Monthly)
	Ludwig von Mises Institute
	Volume 13, Number 6, June 1995, p.4
	Subscriptions: 1-334-844-2500

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    > -< !oS uoY dloT I >-
    
    .paehc ,llew , era stohs paehC
    
    Investment in Mexico has not 'dried up'.  Clinton's loan program is not
    unconstitutional.  And the peso crisis hurt Mexico more than anyone. 
    All that balderdash is trumpeting "I told you so" but actually you told
    us nothing of the kind.  You worried about "lost sovereignty" and "lost 
    US jobs (GIANT SUCKING SOUND)", none of which is what you whine about
    now.  Get a life, Mike.
    
    Bitch about the source?  Nah, the content was such an easy target.
    
    DougO

    I'm glad you showed up.
    
    How much money did the US toss on down to Mexico?
    
    How did it get spent?  where did the money come from doug?
    
    The "peso crisis" may hurt mexico, but if the US payed $52Billion
    to subsidize this boondoggle, I'd say we got hurt to.
    
    Lost sovereignty was over GATT and the WTO.  Here's the US pleading 
    it's case to an international governing body.  If I were prez,
    I'd tell Japan to shove their cars, and everything else up there
    bumm.... sideways.  Who can afford to play hardball?  US.  Do we
    need to trade with japan?  No.  do they need to trade with us?  
    Probably.  Hell, if we can't sell into their markets now, what they
    hell do we care if they shut us off?  All those lexus folks worrying
    about their jobs... sell Chevrolets, or Beemers.  Maybe even sell
    fords.
    
    This whole thing STINKS.

    Let's deal with this separately.
    
    > Clinton's loan program is not unconstitutional.
    
    Show me, specifically, under what authority the president invoked
    this little bail out.  Show me where this is authorized in the
    constitution.  If, and I believe this to be the case, Mr.C excersized
    "executive authority" to send the money to mexico... you loose.
    
    If you can prove otherwise, I will stand corrected.
    
    The clock's ticking (tick-tock).

    
    In the years before NAFTA, Mexico was one of the fastest developing
    countries in the world. The Mexican stock market was only topped by
    very few in the world, and Telefonos de Mexico was a stock shooting up
    like a rocket. 
    
    You don't have to be a professor in economics to realize that this
    wouldn't go on forever. Development goes in cycles. Up and down.
    
    So don't be afraid, it will be going up again. The euphoria was too big
    and resulted in equally strong pessimism. Sooner or later people will
    realize that there's reason for optimism - just not for unreflected
    euphoria - and the Mexican economy will go up again.
    
    I mean, how old is NAFTA ? 
    Be patient.
    
    Heiko 

    >I mean, how old is NAFTA ?
    >Be patient.
    
     That's the very last thing that the anti-NAFTA forces want to do. They
    want to look at the very short term and bleat "I told you so!" probably
    because they know in their heart of hearts that over the long term the
    pro-NAFTA forces will be right about its economic effects.

    Tell me when we get our $52 BILLION back.  
    Hell, we can't afford to "be patient".  Seriously.
    
    Maybe you can tell me under what authority your money was spent to
    prop up this boondoggle?

    I thought we put up loan guarantees as opposed to the money itself.
    Slightly different, until such time as they default.

    re: Note 135.95 by WAHOO::LEVESQUE
    
    I'll admit I am not following this deal very closely.  I've got
    better things to do.  I guess the trick here is to remember what
    happened, or "not forget" $52 billion is on the move.  Let's wake
    up again when it disappears or when someone decides they ain't gonna
    pay it back.  Next issue is, how DID the cash get put into play?
    Under what authority?  If BC circumvented congress to get the money,
    some folks should be pissed.  $52B is probably a lot more than 
    what's available in the rainy day funds tappable via eo.

    
    re: .96
    
    MadMike...
    
    >I've got better things to do. 
    
    yeah... like lookin' for black helicopters in your neck of the woods!!!
    
    
     :) :) :) :) :) :) :) :)
    

    Of the $52B in loan guarantees, I think I remember that it was only
    $20B that the president directly alocated from his discretionary fund;
    for which Congress, being unable to get its act together, applauded
    him.  The rest of the money came from IMF and other countries in
    smaller amounts.  I think France put up $3B.  Don't remember any of the
    other details.
    
    And Mexico hasn't defaulted on anything yet, so none of the $52B has
    actually been spent.  And you ask under what authority, Mike?  How
    about the congressional authority which delegated a discretionary fund
    to executive control years ago?  
    
    DougO

    A great sucking sound...

    SNARF!

From:	US3RMC::"[email protected]" 18-OCT-1995 10:32:45.70
Subj:	The Daily - October 18, 1995 (fwd)

--------------------------------------------------------------------------------
Canadian international merchandise trade
August 1995
 
Canadian exports surged 9.6% in August to reach $21.3 billion, their highest
level since January. Exports to all of Canada's trading partners increased, but
shipments were especially strong to the United States and non-OECD countries.
Automotive shipments accounted for 70% of the increase, as auto production
resumed after July's longer than normal plant shutdowns.
   Imports were up 3.5% in August, to $18.6 billion, as automotive and energy
products began to recover from two months of decline. More goods were imported
from all trading partners except Japan and the European Union.
   The strong performance of exports led the merchandise trade balance to a
record $2.7 billion surplus in August. The surplus with the United States
increased the most, to a record $3.3 billion, thanks to the robust automotive
trade.
 
Exports advanced strongly as auto production resumed
 
   Exports of automotive products shot up 36.0% in August as production resumed
following July's plant closures for vacations and retooling. Stronger demand for
vehicles in the United States was also a factor, helping boost car and truck
exports to their highest level since February. Parts exports rose modestly as
production in the United States returned to normal levels after the shutdowns.
In all, automotive exports stood 6.6% above their August 1994 level.
   Machinery and equipment exports gained momentum in August, rising 6.7% after
six months of slow advances. Although growth was widespread in the sector, most
of the strength came from helicopters and high-valued jet aircraft. Also
bolstering exports were sales of office machines to the United States, up
solidly for two months running.
 
     Note to readers
 
        Merchandise trade is only one component of the current account
     of Canada's balance of payments, which also includes trade in
     services. In the second quarter of 1995, an overall merchandise
     trade surplus of $5.3 billion contrasted with a current account
     deficit of $5.7 billion.
 
   Exports of industrial goods advanced 3.2% in August, largely reflecting
strong shipments of metal ores and concentrates-especially to the European
Union. Demand for most industrial goods has been on a downward trend since
January, awaiting a pickup in U.S. manufacturing activity.
   Forestry products provided a healthy boost to overall exports in August, as
lumber and newsprint sales increased 8.8% and 2.9% respectively. Lumber
continued to respond to a strengthening U.S. housing market and to growing
demand from Japan.
   Elsewhere in natural resources, energy product exports grew 5.2% because of
strong Japanese purchases of coal. Crude oil exports were up modestly after a
precipitous decline in July. Wheat and fish exports fell, pulling down overall
exports of agricultural products by a small margin.
 
Automotive and energy products gave imports a boost
 
   Over half of August's import gain was attributable to the automotive sector.
Auto imports rose 9.5%, offsetting declines posted since March. August's
increase came about as U.S. auto production resumed after the extended shutdowns
in July. While truck imports advanced 21.0% from July, car imports rose 11.3%.
Imports of parts grew 6.1% in August, as Canadian auto production returned to
normal.
   Machinery and equipment imports picked up steam in August (+3.5%), reflecting
strength in aircraft, engines and parts (+40.9%) and office machines (+11.4%).
   Energy product imports advanced 43.6% in August. Crude oil purchases
dominated the picture, but refined petroleum products and coal were also strong.
The trend for imports of energy products other than crude oil has been flat
since August 1994.
   Imports of food gained marginally in August, as demand for imported fruits
and vegetables remained low, offset somewhat by imports of fish and sugar
preparations. In total, agricultural imports have remained flat throughout 1995.
   Weakness in a number of commodities kept industrial goods imports from
advancing in August, despite buoyancy in chemicals and plastics. Falling imports
of industrial goods have reflected the slackness in Canadian manufacturing since
February.
 
Revisions
 
   Merchandise trade data are revised on a continuing basis for every month of
the current year. Factors that make revisions necessary include late receipt of
import and export documentation, incorrect information on customs documents,
replacement of estimated figures with actual values once available, changes to
classification of merchandise based on more current information, and updated
seasonal adjustments.
   Revised data for January 1991 to July 1995 are available in the relevant
CANSIM matrices.
 
Available on CANSIM: matrices 3611-3616, 3618-3629, 3651, 3685-3713, 3718-3720
and 3887-3913.
 
   This release contains a summary of the merchandise trade data that will be
available next week in Canadian international merchandise trade
(65-001, $19/$182). It will include detailed tables by commodity and country on
a customs basis.
   For more timely receipt of the merchandise trade data, a fax service is
available the morning of release.
   Current account data, which incorporate merchandise trade statistics,
services transactions, investment income and transfers, are available on a
quarterly basis in Canada's balance of international payments
(67-001, $30/$120). See "How to order publications".
   For further information on this release, contact Suzie Carpentier
(613-951-9647), Marketing and Client Services Section, International Trade
Division (1-800-294-5583).
 
--------------------------------------------------------------------------------
Table: Merchandise trade of Canada
______________________________________________________________________________
                               June 1995        July 1995      August 1995
______________________________________________________________________________
 
                                   seasonally adjusted, $ current
                           _______________________________________________
 
 
                                             $ millions
                           _______________________________________________
 
Principal trading
  partners
 
Exports
United States                     16,588           15,794           17,253
Japan                              1,076            1,014            1,018
European Union                     1,166            1,090            1,158
Other OECD countries(1)              287              222              308
All other countries                1,626            1,358            1,605
Total                             20,743           19,478           21,343
 
Imports
United States                     13,524           13,469           13,978
Japan                                676              633              613
European Union                     2,148            1,793            1,616
Other OECD countries(1)              677              542              654
All other countries                1,767            1,589            1,791
Total                             18,792           18,027           18,653
 
Balance
United States                      3,064            2,325            3,275
Japan                                400              381              405
European Union                      -982             -703             -458
Other OECD countries(1)             -390             -320             -346
All other countries                 -141             -231             -186
Total                              1,951            1,451            2,690
 
Principal commodity
  groupings(2)
 
Exports
Agricultural and
  fishing products                 1,650            1,533            1,519
Energy products                    2,137            1,864            1,960
Forestry products                  3,306            3,305            3,424
Industrial goods and
  materials                        3,956            3,761            3,882
Machinery and equipment            4,245            4,110            4,386
Automotive products                4,980            4,064            5,526
Other consumer goods                 577              593              618
Special transactions
  trade(3)                           867              840              845
 
Imports
Agricultural and
  fishing products                 1,148            1,128            1,131
Energy products                      721              518              744
Forestry products                    177              180              163
Industrial goods and
  materials                        3,721            3,757            3,713
Machinery and equipment            6,401            6,000            6,212
Automotive products                3,967            3,871            4,238
Other consumer goods               2,250            2,082            2,121
Special transactions
  trade(3)                           466              482              427
 
______________________________________________________________________________
 
 
                            June 1995 to     July 1995 to         January-
                               July 1995      August 1995      August 1994
______________________________________________________________________________
 
                                   seasonally adjusted, $ current
                           _______________________________________________
 
 
                                      % change                  $ millions
                           ______________________________    _____________
 
Principal trading
  partners
 
Exports
United States                       -4.8              9.2          112,938
Japan                               -5.8              0.4            6,246
European Union                      -6.5              6.2            6,970
Other OECD countries(1)            -22.6             38.7            2,498
All other countries                -16.5             18.2            9,523
Total                               -6.1              9.6          138,174
 
Imports
United States                       -0.4              3.8           96,587
Japan                               -6.4             -3.2            5,343
European Union                     -16.5             -9.9           10,688
Other OECD countries(1)            -19.9             20.7            4,209
All other countries                -10.1             12.7           13,280
Total                               -4.1              3.5          130,106
 
Balance
United States                        ...              ...           16,351
Japan                                ...              ...              903
European Union                       ...              ...           -3,718
Other OECD countries(1)              ...              ...           -1,711
All other countries                  ...              ...           -3,757
Total                                ...              ...            8,068
 
Principal commodity
  groupings(2)
 
Exports
Agricultural and
  fishing products                  -7.1             -0.9           11,437
Energy products                    -12.8              5.2           13,955
Forestry products                    0.0              3.6           19,902
Industrial goods and
  materials                         -4.9              3.2           24,860
Machinery and equipment             -3.2              6.7           27,263
Automotive products                -18.4             36.0           36,115
Other consumer goods                 2.8              4.2            3,743
Special transactions
  trade(3)                          -3.1              0.6            5,886
 
Imports
Agricultural and
  fishing products                  -1.7              0.3            8,053
Energy products                    -28.2             43.6            4,796
Forestry products                    1.7             -9.4            1,150
Industrial goods and
  materials                          1.0             -1.2           24,591
Machinery and equipment             -6.3              3.5           41,627
Automotive products                 -2.4              9.5           31,140
Other consumer goods                -7.5              1.9           15,250
Special transactions
  trade(3)                           3.4            -11.4            3,217
 
______________________________________________________________________________
 
 
                                January-         January-      August 1994
                             August 1995      August 1994        to August
                                                       to             1995
                                                 January-
                                              August 1995
______________________________________________________________________________
 
                                   seasonally adjusted, $ current
                           _______________________________________________
 
 
                              $ millions               % change
                           _____________    ______________________________
 
Principal trading
  partners
 
Exports
United States                    133,620             18.3             10.3
Japan                              7,806             25.0             12.6
European Union                     9,702             39.2             58.6
Other OECD countries(1)            2,417             -3.2            -18.1
All other countries               12,652             32.9             25.5
Total                            166,197             20.3             12.8
 
Imports
United States                    111,887             15.8              6.0
Japan                              5,961             11.6             -0.5
European Union                    13,930             30.3              4.7
Other OECD countries(1)            5,422             28.8            -11.1
All other countries               13,794              3.9             11.4
Total                            150,995             16.1              5.5
 
Balance
United States                     21,733              ...              ...
Japan                              1,845              ...              ...
European Union                    -4,228              ...              ...
Other OECD countries(1)           -3,005              ...              ...
All other countries               -1,142              ...              ...
Total                             15,202              ...              ...
 
Principal commodity
  groupings(2)
 
Exports
Agricultural and
  fishing products                12,620             10.3              6.7
Energy products                   15,673             12.3             -5.0
Forestry products                 25,602             28.6             24.0
Industrial goods and
  materials                       31,820             28.0             15.9
Machinery and equipment           33,810             24.0             19.9
Automotive products               41,871             15.9              6.6
Other consumer goods               4,551             21.6             23.4
Special transactions
  trade(3)                         6,809             15.7              9.3
 
Imports
Agricultural and
  fishing products                 9,000             11.8              3.0
Energy products                    5,671             18.2            -19.7
Forestry products                  1,409             22.5              5.8
Industrial goods and
  materials                       30,385             23.6              9.6
Machinery and equipment           49,739             19.5              9.0
Automotive products               34,263             10.0             -1.6
Other consumer goods              17,236             13.0              4.7
Special transactions
  trade(3)                         3,587             11.5              2.9
 
______________________________________________________________________________
 
 
(1)  Includes Australia, Iceland, Mexico, New Zealand, Norway, Switzerland
     and Turkey.
(2)  Figures not adjusted to balance of payments basis.
(3)  Mainly, these are low-valued transactions, value of repairs to equipment
     and goods returned to country of origin.
(...)  Figures not appropriate or not applicable.
  

"...  The early numbers are in, and they are not good.  The U.S. merchandise 
trade surplus with Mexico reached a peak of $5.4 billion in 1992, the last year 
before NAFTA was approved.  By 1994 it had fallen to $1.3 billion, and by the 
end of 1995 it had become a deficit of $15.4 billion.  This marks a three-year 
deterioration of $20.8 billion.  Supportors of NAFTA claimed that every billion 
dollars of exports would generate 19,000 jobs.  If that's true, NAFTA has 
already cost the U.S. economy 395,200 jobs, almost all of which were in the 
relatively well-paying manufacturing sector.  This cost is separate from the 
depressing effect that Mexican daily wages of $6.00 have had on American wages.
The export of jobs will continue as companies such as Ford, Mattel, Zenith, and 
General Electric shift production south of the border." - Thomas I. Palley, 
page 58, July 1996, THE ATLANTIC MONTHLY.

    It's all Clinton's fault!

    Ho ho!  Quick quiz.  Which of the following prominent republican
    leaders lobbied hard for NAFTA, using personal influence and friendship
    to try and persuade the Newtron bomb into backing the measure?  
    
    Mrs. Dougherty
    Mrs. Schwartz
    Jack Kemp
    Ms. Granola Birkenstock
    
    Take your time.  Think real hard.  It could be a trick question.  
    
    

I'll take serial influence peddlers for 400.

    Actually, it's spelled, "Swartz".
    
    NNTTM!

    .102
    
    paul!  how's my goombah?!  interesting note, could it be
    that pat buchanan was right on this one?

    
    More fine examples of taking only a small portion of the picture
    and blowing it up to become the entire picture ....
    
    
    

    re .102- as Fyfe just observed, what a load of hogwash.  What does this
    really say?  Lets go through it.
    
    "The U.S. merchandise trade surplus with Mexico reached a peak of $5.4
    billion in 1992, the last year before NAFTA was approved.  By 1994 it
    had fallen to $1.3 billion, and by the end of 1995 it had become a
    deficit of $15.4 billion.  This marks a three-year deterioration of
    $20.8 billion."
    
    That is, we sold $5.4B more to Mexico than they sold to us in 1992.
    We sold $1.3B more to Mexico than they sold to us in 1994.  Note that
    we can't tell whether the total amount of trade increased or decreased.
    And in 1995 Mexico sold us $15.4B more than we sold them.  Reports I've
    seen suggest that total volume of trade climbed substantially the last
    two years.
    
    Note also that this claim is in regard to "merchandise trade".  What
    about trade in services?  Any good engineering design firms building
    civil engineering bridges, highways, sewers, business parks in Mexico?
    Strange how the Atlantic doesn't care to report the SURPLUS in the
    trade in services.
    
    > Supportors of NAFTA claimed that every billion dollars of exports would
    > generate 19,000 jobs.  If that's true, NAFTA has already cost the U.S.
    > economy 395,200 jobs, almost all of which were in the relatively
    > well-paying manufacturing sector.
    
    FALSE.  The "deficit" in balance of trade is not the correct number to
    apply to this claim of NAFTA "Supportors".  The absolute value of the
    US-exports half is.  That is, if we sold $100B in 1994 and $120B in
    1995, the 1994 claim is that 380,000 jobs would have been created.  It
    could be true that the US bought $20.8B more than we sold, but that
    wouldn't necessaarily destroy jobs in our manufacturing sector.  The
    Atlantic is badly misusing the numbers presented.
      
    For some reason, some people will continue to insist that NAFTA was a
    bad deal.  Some of them will even lie about it.  I don't know why this
    is so.  But watch out for them- examine the figures presented with a
    large grain of salt.
    
    DougO