18 



That is a joke, for anybody [Laughter.] 



Everybody takes everything so seriously around Washington — ex- 

 cept NAFTA. Go ahead, please. 



Ambassador Kantor. And maybe we ought to be a little more 

 balanced, as Senator Daschle suggested, about NAFTA as well as 

 we go through our advocacy for it. And others will take other posi- 

 tions in both parties, and as you correctly point out, it is interest- 

 ing who is on both sides. I am not sure I have ever in my lifetime 

 seen such an arrangement of political ideologies or lack thereof for 

 and against a treaty. 



Let me apologize. I did pick up my daughter at school, but I will 

 stay here as long as the Chair wishes. We do have someone at 

 home with her right now. 



I would like to start by saying the North American Free Trade 

 Agreement with the side agreements will not solve every economic 

 problem this country has. It will not. But it is a vital part of an 

 overall approach of this administration to create jobs, to open mar- 

 kets, and to increase the wealth of this country. 



Number two, it will not solve every problem we have with Mex- 

 ico. There are some people who want it to. There are those on this 

 side of the table who tried hard to solve a lot of problems. But let 

 me say it will not solve every problem we have. But it makes the 

 situation with Mexico and in North America substantially and sig- 

 nificantly better than it has been before. 



Let me submit my statement for the record and just make a few 

 comments, and Secretary Espy certainly has brilliantly covered 

 much of the agricultural sector. First let me say that the best argu- 

 ment we can make for NAFTA and I think the most compelling ar- 

 gument is: We have a free trade agreement today with Mexico. The 

 problem is it only goes one way. It is free trade for the Mexican 

 Government and Mexican businesses and Mexican workers, those 

 workers in Mexico and those businesses who have moved there. 

 And it is not free trade for our companies and our workers. 



Let me explain that. Mexico at one point had 100-percent tariffs, 

 and then they were bound at GATT at 50, and now they average 

 10 percent, 16 percent in agriculture. Our tariffs have always been 

 low, especially since the Second World War. They are now at 4 per- 

 cent. Mexican tariffs are about 2.5 times larger than our tariffs. 



Let me say, number one, that causes a problem for U.S. workers 

 and U.S. businesses as you try to export into Mexico. 



Number two, import licensing requirements in agriculture is a 

 pernicious system we'll get rid of on day one that NAFTA goes into 

 effect. 



Number three, other unfair rules that affect goods and services 

 are production requirements and performance requirements. They 

 make it impossible for some industries, difficult for others, to ex- 

 port into Mexico. 



Number four, the maquiladora program, begun in 1965 with the 

 cooperation of both governments, says if you want to establish a 

 business in northern Mexico, come on in. You can take every com- 

 ponent part you import from the United States tariff-free, make it 

 into a value-added product; but you can't sell it in Mexico, you have 

 to export it back to the United States. 



