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As the International Trade Commission's report pointed out, the NAFTA 's impact 

 on the United States will vary by region and product. The report "Potential Impact 

 on the U.S. Economy and Selected Industries of the North American Free Trade 

 Agreement," which was written by the Commission, stated the case as it is currently 

 understood — that there would be short-term and long-term effects by the trade 

 agreement. The report said, in part, that the NAFTA is expected to expand U.S.- 

 Mexican trade substantially. The estimated gains in U.S. exports to Mexico range 

 from 5.2 to 27.1 percent. The projected increases in U.S. imports from Mexico range 

 from 3.4 to 15.4 percent. 



The projected long-term gains in aggregate employment are less than 1 percent 

 for the United States and Canada, but are up to almost 7 percent for Mexico. The 

 expected increases in the average real wages are 0.3 percent or less for the United 

 States, 0.5 percent or less for Canada, and 0.7 to 16.2 percent for Mexico. Although 

 the evidence on the direction of real wage effects for low- and high-skilled U.S. 

 workers is mixed, the preponderance of evidence indicates an indiscernible effect on 

 the United States wage rates for both low- and high-skilled workers. 



According to the report, Mexico's improved access to advanced technology could 

 lead to a long-term increase in Mexico s rate of economic growth. As longstanding 

 participants in a global open trading regime, the United States and Canada may 

 not realize substantial dynamic gains from the NAFTA, but will benefit from the 

 market opportunities that are created by the economic growth in Mexico. 



The NAFTA will raise the standard of living in Mexico, creating new markets for 

 U.S. products, including those from our farms. At the same time, the economic activ- 

 ity in Mexico, as a result of freer trade between 360 million consumers, will result 

 in increased employment in Mexico, alleviating part of the human misery that 

 drives Mexican citizens across the Rio Grande to seek illegal employment in the 

 United States. It will also provide the economic steam engine to help Mexico im- 

 prove its labor and environmental standards. Without the NAFTA, there is no as- 

 surance that these things will ever happen. Which is the better hemisphere to live 

 in— pre-NAFTA or post-NAFTA? 



The NAFTA will create new, long-term growth opportunities for U.S. farm exports 

 in the Western Hemisphere far into the next century. The USDA's Office of Econom- 

 ics' most recent appraisal of the Agreement's impact on agricultural trade contains 

 the following: 



In the year 2008, when the Agreement is fully implemented, U.S. farm ex- 

 ports are estimated to be $2 to $2.5 billion higher than without the Agree- 

 ment. Most of that will be gains in U.S. farm exports to Mexico. Farm ex- 

 ports to Mexico have been on an upswing due primarily to Mexico's lowered 

 barriers to U.S. agricultural imports at the same time its economy boomed. 



The further lowering and eventual removal of Mexico's tariff and nontariff bar- 

 riers to trade will result in further increases in U.S. farm exports. This will be true 

 for a large number of U.S. agricultural commodities. 



The NAFTA's provisions are well known to you and the members of your commit- 

 tee. We believe that there are sufficient safeguards and other measures to protect 

 the import-sensitive commodities. Designated quantities of these safeguarded prod- 

 ucts may enter at a low tariff, with imports larger than those quantities paying a 

 higher tariff. The United States can apply such safeguards to a wide range of im- 

 pacted commodities, including fresh tomatoes, eggplants, chili peppers, squash, wa- 

 termelons, and onions. 



There are other safeguards built into the NAFTA. The products that receive favor- 

 able tariff treatment must originate (or be substantially transformed, such as 

 through a manufacturing process) in Mexico, Canada, or the United States. Under 

 the Rules of Origin, a country cannot import farm goods and ship them to a NAFTA 

 partner under the Agreement's more favorable tariff treatment. Mexico's tariffs with 

 other countries will not be changed by the NAFTA. 



Opponents of the NAFTA argue that the Agreement will result in unsafe food en- 

 tering the United States because of another country's lower standards. Under the 

 NAFTA, it will be possible for us to maintain our stringent standards for health, 

 safety, and the environment, and prohibit imports that do not meet U.S. standards. 

 State and local governments can enact their own import standards if they are based 

 on scientific grounds. Each country in the Agreement can maintain the grade stand- 

 ards to fit its marketing rules. The local content requirements of Mexico's 

 manufacturing rules will be eliminated under the Agreement, opening up new mar- 

 kets for U.S. goods. 



Some of the highlights on increased U.S. farm exports to Mexico under the 

 NAFTA are: 20-percent increase in wheat, 2.5 million ton duty-free quota for corn 

 that will increase 3 percent each year, 10- to 20-percent increase in rice, $400 to 



