39 



Now, you say we are going to sell more corn down there. Well, 

 all right, we will sell more corn down there. They are going to buy 

 more corn, although I question that. Maybe they will want to buy 

 it from South America rather than from us. Why wouldn't they buy 

 it from Argentina and places like that? 



Mr. O'Mara. Preference. 



Senator Harkin. What? 



Mr. O'Mara. Because there is a big preference. 



Senator Harkin. There is a what? 



Mr. O'Mara. There is a big preference. There is no incentive to 

 buy from Argentina. We have the preference in that market for 

 corn. 



Ambassador Kantor. That is right. 



Mr. O'Mara. They would have to pay more money for Argentine 

 corn. 



Ambassador Kantor. Let me add two things to that, if I might, 

 Senator, that I think are quite important, which I know you know. 

 The fact is this agreement is in our favor, not theirs. The rules 

 have been stacked against our farmers and against our manufac- 

 turers for years. We are changing those rules in our favor. The tar- 

 iffs have been higher. They have had import licensing require- 

 ments, and we for the first time in the history of any trade agree- 

 ment ever have a side agreement on enforcement of environmental 

 laws which, in fact, has been endorsed by six of the largest environ- 

 mental organizations in this country, which will force Mexico to en- 

 force environmental standards or be subject to both fines and then 

 later sanctions, trade sanctions. That has never happened before. 



So I think it opts in the opposite direction. The situation now, 

 now with unfair rules, would draw somebody to Mexico. The situa- 

 tion later will not. In fact, you can export products and not jobs 

 later. 



Senator Harkin. Mr. Ambassador, isn't it true that the Canadi- 

 ans offered an environmental standard in the trade agreement 

 early on that would have set certain international norms and Mex- 

 ico didn't want it and we sided with them and we turned it down, 

 and now we have a side agreement that really, in effect, has no 

 teeth to it? There is no enforcement in the side agreements? 



Ambassador Kantor. Well, that is not true, number one. 



Senator Harkin. The Canadians did not offer an 

 environmental 



Ambassador Kantor. Well, no, no. I said it is not true we don't 

 have teeth in the side agreements. The side agreements are the 

 strongest side agreements on environment and labor in the history 

 of trade agreements, and there is no one who has denied that, not 

 even those who oppose the NAFTA. So that is number one. 



Number two — I was trying to think of your first point. It is really 

 interesting to hear the arguments against the NAFTA. The status 

 quo is not in the best interest of American workers or American 

 farmers or American business. It just is not. We have been having 

 our clock cleaned because we have allowed that to happen — high 

 tariffs, high tariff barriers like import licensing requirements, a 

 maquiladora program that was — and I know that is not in agri- 

 culture, but it was a disaster — nonenforcement of environmental 

 and labor standards. We are getting to those. 



