14 



and their levies. Lastly, if we don't do it, Mr. Chairman, I fear that 

 we will have, again, negative consequences at the GATT where we 

 have to show our leadership in this particular area. 



So I do think that the United States needs the NAFTA, and I 

 have seen it work. I was in Mexico 2 weeks ago. I had the oppor- 

 tunity to travel there to cut the ribbon on the largest trade show 

 that the United States and the USDA has ever held in any country 

 since we have been doing these shows. The show was organized by 

 FAS, the Foreign Agricultural Service, and it was managed by the 

 USDA. I was there 2 days, Mr. Chairman, and I was amazed by 

 the presentations and exhibits of more than 200 U.S. exhibitors. 

 Almost every State in our country took part, all there with expecta- 

 tions of high sales. 



And so this sucking sound we hear? I heard a sound as well. I 

 heard a sound of a stampede of Mexican agents and purchasing ne- 

 gotiators; all were there to review evidence of U.S. agriculture, par- 

 ticularly value-added agriculture. 



Then I had a chance to walk through certain grocery stores in 

 Mexico, and I saw shelves lined with American food products. And 

 so I can certainly tell you in no uncertain terms, without equivo- 

 cation, that it is a good deal for us, it is a good deal for U.S. agri- 

 culture, and Mexico is no doubt a major market for U.S. agricul- 

 tural products. 



In fact, Mr. Chairman, Mexico is already the third largest foreign 

 market for U.S. agriculture products and the second largest market 

 for U.S. -manufactured products. U.S. agriculture exports to Mexico 

 will reach, we believe, about $4 billion this year, more than double 

 the 1988 level. Why? Because President Salinas has already par- 

 tially opened the Mexican market, and we have seen incredible ad- 

 vances. 



Since 1986, when he came in, we had export sales there of about 

 $1 billion. And just by his unilateral actions, we have seen almost 

 a quadrupling in the U.S. presence in their agricultural market. So, 

 simply, we want to lock in these trade gains. 



These exports to Mexico already support an estimated 700,000 

 U.S. jobs in agriculture, manufacturing, transportation services 

 and other industries. Four hundred thousand of those jobs were 

 created just since 1986, as I said, since Mexico began opening up 

 its economy. So the potential as a market for U.S. goods is even 

 greater. Mexico has about 90 million people. We prefer to consider 

 them as 90 million consumers, including Mexico's large and grow- 

 ing middle class. And even though Mexico's tariffs have dropped 

 significantly over the past few years, their tariffs are still 2.5 times 

 higher than ours. 



The average U.S. tariff on goods from Mexico is only 4 percent, 

 while the average tariff on goods from the United States to Mexico 

 is 10 percent. So under NAFTA, Mexico must eliminate these high 

 tariffs completely. 



For the first time, our trading relationship will develop in a con- 

 trolled way, not by accident, and for the first time, we will be build- 

 ing on a level and on a fair playing field. 



There is lots of talk here about losers and winners under the 

 NAFTA. If you consider the doctrine of comparative advantage, I 

 believe there are some clear winners for agriculture under the 



