While Vicente Fox’s recent election as Mexico’s new president was largely hailed in the United States as a step in the right direction, it also produced the usual backlash from organized labor, economic protectionists and xenophobes.
Right now, their Chicken Little cries are confined mainly to talk-radio shows, but this is the same crowd that nearly sunk the North American Free Trade Agreement a decade ago and it can be expected to use all its political might to block Fox’s efforts to encourage more trade between Mexico and the United States. If they succeed, they will hamper L.A.’s growth prospects for decades to come.
Fox was elected based on a platform of major reforms, many of which would have a profound impact on this side of the border. Perhaps more than any other city, Los Angeles is poised to benefit. Thanks largely to NAFTA, trade between L.A. and Mexico is already booming exports from L.A. to that country reached $2.8 billion in 1998, up from $1.2 billion in 1993. But there is still a long way to go, and the reforms proposed by Fox would prime the pump for a much freer flow of goods.
There are about 440,000 Latino-owned businesses in Los Angeles County, many if not most of which maintain strong ties to Mexico. Corruption, monopolies and restrictive trade policies have blocked those companies from taking full advantage of their connections, but Fox has promised to attack all three of these barriers.
The arguments from those who feel threatened by Fox’s reforms sound like they were lifted word-for-word from the anti-NAFTA rants of the last decade. The first is a cry that U.S. jobs will be lost as more factories shift operations to Mexico. There is no question that certain manufacturing jobs will be lost, but the adherents to this belief led by organized labor aren’t taking into account the number of jobs created in the U.S. by a stronger, trade-driven economy. Given the current record lows in U.S. unemployment, it’s hard to argue that NAFTA resulted in a net loss of jobs.
Next is the effort to mobilize environmentalists with dire warnings about weak Mexican pollution standards. Mexican trucks with poor emission controls come and go across the border, polluting American air. Mexican factories near the border pour toxic chemicals into the air, ground and water, which then seep north. These are legitimate concerns, but they aren’t without solutions international bodies like the North American Commission for Environmental Cooperation already exist to work toward solving them, and with enhanced trade will come greater pressure on Mexico to enforce pollution standards.
The final argument says that opening the border further will only encourage more illegal immigration. Those who profess this belief seem to fundamentally misunderstand why people come to America to begin with. Mexicans don’t cross the border because they really enjoy living in a country where they don’t speak the language and are unfamiliar with the culture; they come because conditions are so poor in their home country that even working as a day laborer in Los Angeles seems like a major step upward. Fox’s reforms are all aimed at improving the Mexican economy, and that can only mean that Mexicans will have less reason to flee northward.
Not all of Fox’s ideas are necessarily good ones. For example, his ultimate goal is to create a North American common market similar to the European Union, with a common currency and free movement of labor. That proposal faces tough sledding in the U.S., given that Mexico stands to gain a lot more from such a deal than America.
Most of Fox’s reforms, though, stand to benefit not only Mexico, but Los Angeles. As last week’s trade pact with Vietnam shows, the world is becoming a less restrictive place, and trade barriers are falling right and left, whether the protectionists like it or not. Fox should be given the chance to carry his reforms out.
