20 



est importer of agricultural goods today, $3.8 billion. It will grow 

 in 15 years to over $10 billion. We will have 100,000 more jobs, in- 

 cluding 56,000 more directly related to NAFTA in agriculture be- 

 cause of this growth in exports to Mexico. 



Let's not miss this opportunity, and one more thing. I think it 

 is interesting if you look at population growth, which I know this 

 committee looks at because it makes so much difference in agri- 

 culture, in percent of population in 25 years, Mexico is growing 

 three times faster than the United States. Mexico will have 107 

 million people by the year 2007 on their way to the middle of the 

 next century of 150 million people. Sixty percent of the population 

 of Mexico is under 25 years old, and they consume twice as much 

 cereal per capita as U.S. citizens. 



This is an opportunity of this country in goods, in services — 

 which they open up for the first time, by the way — and for agri- 

 culture. It should not be missed. 



I look forward to answering questions from you, Mr. Chairman, 

 and thank you for your kind remarks, and from you, Senator 

 Lugar, and other members of the committee. 



Thank you. 



The Chairman. Thank you, Mr. Ambassador. 



Let me ask you, if you look at rural areas, an area most of us 

 on this committee are concerned with, you find a preponderance of 

 the jobs are in manufacturing industries, and many of them rely 

 on lower skilled labor. A lot of them are jobs that are susceptible, 

 very susceptible, to competition with Mexican labor. 



Do you think that NAFTA would have a negative effect on jobs 

 in rural America? What is your estimate of its effect on rural 

 America? 



Ambassador Kantor. No, I don't, Mr. Chairman. Again, the past 

 is prologue. The last 5 years, as these rules have become more fair 

 and we have lowered tariff barriers, 48 of the 50 States have in- 

 creased their exports to Mexico, not only agricultural but goods and 

 manufactured goods as well. We have created a substantial number 

 of jobs. 



There is no evidence that, in fact, whether it is in so-called low- 

 skill or low-wage jobs or in high-skill, high-wage jobs we can't com- 

 pete. Frankly, we have increased our exports to Mexico in almost 

 every category you can imagine over the last 5 years. 



Interestingly, the average Mexican consumer buys about $450 a 

 year in U.S. goods, more than the average Japanese consumer or 

 the average consumer in the European Community, although obvi- 

 ously their wages are less per capita or their income is less per 

 capita. We don't see that happening, and in fact, for small and me- 

 dium-sized businesses, many of those in rural areas, as you know 

 better than I, this is a real winner. 



Small and medium-sized businesses work on, by their very na- 

 ture, small margins. If you have tariff barriers and nontariff bar- 

 riers, they can't compete. Larger businesses can absorb that unfair- 

 ness or that inequity. Larger businesses also can open up in Mexico 

 where small and medium-sized business by its very definition can't. 



When we open up under NAFTA and lower those barriers, we 

 will be exporting products, not jobs, and a lot from small and me- 

 dium-sized businesses. And I don't want to go too long, but I have 



