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Archive for Thursday, October 31, 1991

KU PROF SEES BENEFIT FROM FREE-TRADE PACT

October 31, 1991

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A free-trade agreement between Mexico and the United States would benefit both countries in the long run, but may not become a reality for several years because of short-term political issues, an expert on Latin America said during a luncheon Monday.

"The bottom line is free trade would benefit both contries in the long run by expanding markets and lower prices," said Charles Stansifer, Kansas University professor of history and former director of KU's Center for Latin American Studies.

"It takes political courage to make these long-range decisions," he said. "But political courage is in short supply these days."

Stansifer spoke to about 160 people attending a Lawrence Rotary Club luncheon at the Lawrence Holidome.

He said a free-trade agreement, signed by President Bush and Mexican President Carlos Salinas de Gortari in June 1990, is very important, but has been overshadowed in the news by other events.

THE AGREEMENT, Stansifer said, opened the doors for trade negotiations between the United States, Mexico and Canada.

"Some people will benefit and some people will not benefit if a free-trade agreement is signed and approved by Congress," Stansifer said.

He said long-term benefits of a North American free-trade agreement would include more customers for U.S. firms, and would allow U.S. businesses to expand into Mexico.

But Stansifer said strong opposition to an agreement was mounting from labor groups and some businesses, which fear job losses for Americans.

Environmentalists also are against an agreement because they claim U.S. companies would be able to operate in Mexico with less stringent environmental standards, Stansifer said.

"There is still a lot of debate on whether these arguments are correct," he said.

STANSIFER said negotiations on the free-trade agreement could be finished by this spring.

But he said because the presidential campaign will have started by then, the agreement may be put off until 1993.

"I'm pessimistic that we will have an agreement anytime before 1994," he said.

A free-trade agreement with Mexico is more important than trade agreements with other countries because Mexico is this country's third largest trading partner, he said. Canada is the United States' top trading partner and Japan is number two, he said.

Stansifer also said Mexico has been undergoing a type of economic "perestroika," or restructuring since 1986.

"The privatization of Mexico has been remarkable," he said. "It adds up to a remarkable turnabout, maybe not as much as in the Soviet Union, but perhaps with a better chance of success."

STANSIFER said 450 of 700 state-owned industries have been sold by the government to private concerns.

He said that economic policy shift represents a change that could allow more foreign investment after years of restrictive practices designed to protect Mexican property and industry.

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