38 



Ambassador Kantor. Five years of evidence that goes in the op- 



Eosite direction. As Mexico began to liberalize its trade, lower tariff 

 arriers, change the rules, allow U.S. products in until — well, with 

 beef, they raised the tariff in the last year, and beef exports went 

 down precipitously. In fact, we have done very well in pork and 

 beef and in almost every area of agriculture but wheat, which is 

 fascinating, and I think that has more to do with the Canadian sit- 

 uation than it does any other situation, frankly, which we talked 

 about earlier. 



But we believe that tripling the exports from $3 to $10 billion in 

 agriculture by the year 2007 is helpful. We see it creating about 

 108,000 jobs in agriculture, 56,000 strictly because of NAFTA. So 

 we believe, in fact, that exports will continue and see the Mexican 

 agricultural economy, which is so much smaller than ours, and 

 their problem with water and their problem with other respects — 

 and these gentlemen can answer better than I could — are much 

 more difficult than others that, in fact, we will in some ways domi- 

 nate their agricultural situation. 



In fact, there was great worry on some person's part that we 

 would be so dominant in so many areas of agriculture, of course, 

 that many people would leave the farm. That is one reason this is 

 spread over 15 years, in order not to have that effect. And so there 

 is no doubt that we are a winner in the agricultural sector as we 

 are in many other sectors with Mexico in this situation. 



Senator Harkin. Mr. Moos. 



Mr. Moos. I might also add. Senator Harkin, that we expect that 

 corn will be one of the big winners under the NAFTA agreement. 



Senator Harkin. By the year 2007? 



Mr. Moos. And, of course, the reason for that is that we expect 

 that as Mexico's economy strengthens, there will be more demand 

 for meat products, particularly products like pork. We expect to 

 benefit from that additional demand. Our only concern is whether 

 it is practical to ship the corn down there to enlarge their animal 

 industry. 



From a practical standpoint, providing we can ship the corn 

 down there, one wonders whether they can afford to import the 

 corn to produce the hogs to sell back into the United States. We 

 doubt whether that is going to be practical. 



Senator Harkin. Mr. Moos, I don't know. I think there are at 

 least three factors that would encourage that: first of all, reduced 

 barriers to capital investment; second, less enforcement of environ- 

 mental requirements; and, third, lower wages in labor protections. 



Let's take the second one, environmental standards. One of the 

 biggest concerns now to a hog farmer in America is meeting envi- 

 ronmental restrictions. Now, if I am a big hog producer — I don't 

 mean a family farmer. I mean one of these big outfits, 10,000, 

 20,000 hogs, farrow to finish, you know who I am talking about. 



Mr. Moos. Right. 



Senator Harkin. And I am thinking about investing some place, 

 building other hog operations. If there is a better investment cli- 

 mate in Mexico, if we have a trade agreement that breaks down 

 all these barriers, if the Mexicans don't have to live up to strict en- 

 vironmental standards, why wouldn't I put the hog operation down 

 there? 



