19 



Now, what did the United States do? We then said we won't 

 charge tariffs on the whole product, just on the value-added por- 

 tion. 



Now, if there is any prescription to draw jobs down to Mexico 

 and U.S. businesses, that was it. And there are about 1,000 of 

 them there right now that employ about 250,000 people, another 

 1,000 owned by other either Mexican nationals or by nationals of 

 other countries — 2,000 businesses. 



So let's take what we have. We had high tariff barriers. We had 

 unfair rules, import licensing requirements, the maquiladora pro- 

 gram, and then to add insult to injury, no enforcement of environ- 

 mental or labor standards. So if you are a business person and you 

 have the flexibility to move, especially if you are big — medium- 

 sized and small businesses don't have that flexibility — you went 

 down to Mexico. At least 1,000 of them did and took 250,000 jobs. 



The NAFTA changes that. It makes the rules fair. That is point 

 one. 



Point two, Mr. Chairman and Senator Lugar, which I think is a 

 critical point, we have evidence that lowering those tariffs and get- 

 ting rid of some of those unfair rules works. Now, what is our evi- 

 dence? 



In 1987, President Salinas began a program to lower to some de- 

 gree those tariffs and to lower to some degree or to get rid of to 

 some degree those rules. What happened? Our exports to Mexico 

 went from $12 billion to $40.6 billion, a 3V2-fold increase. We had 

 a $5.7 billion deficit in 1987. Now we have a $5.4 billion surplus. 

 We had 275,000 jobs in 1987 related to exports to Mexico. Today 

 it is 717,000 on its way to nearly 1 million if we can get the 

 NAFTA adopted and ratified by this Congress. 



And so we have evidence that when you get rid of the unfairness, 

 even a little bit — and I know some of you have heard this, and I 

 apologize to the Finance Committee members — you begin to make 

 progress. You create jobs. We become wealthier. We export more 

 goods. 



Now, number three — and Secretary Espy referred to this, and 

 quite eloquently — we are building the largest free trade zone in the 

 world with NAFTA, 370 million people, $6.5 trillion in gross prod- 

 uct. Frankly, it is also the largest trade preference zone in the 

 world. And what does it do? It makes us more competitive with the 

 Japanese and with our European counterparts. Does that help us? 

 Yes, it does. Does it make our businesses stronger? Does it create 

 more jobs here? Yes, it does. And there are 400 million people liv- 

 ing south of the border in the second fastest growing region in the 

 world, from Mexico to Argentina. And let me say today, as I said 

 the other day, if we don't take advantage of those markets, some- 

 body else will. And it doesn't take a leap of imagination to conjure 

 up who that is going to be. 



Shame on us if we miss this opportunity with the NAFTA. Again, 

 it is not perfect. I don't claim it to be; Secretary Espy won't claim 

 it to be. But it is so much better than what we have today, which 

 is getting rid of these unfair rules and growing this large market 

 and growing jobs in the country. 



I won't go through the pages I had on agriculture, although I 

 think they are critical, absolutely critical. Mexico is our third larg- 



