[Congressional Record Volume 140, Number 86 (Thursday, June 30, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       NAFTA--THE FIRST 6 MONTHS

  The SPEAKER pro tempore (Mr. Kanjorski). Under the Speaker's 
announced policy of February 11, 1994, and June 10, 1994, the gentleman 
from California [Mr. Dreier] is recognized for 60 minutes as the 
designee of the minority leader.
  Mr. DREIER. Mr. Speaker, I and several of our colleagues have taken 
time out because today is a very important point for us. We mark today 
the first 6 months of implementation of the North American Free-Trade 
Agreement.
  Now there a year ago right now was a great deal of discussion here in 
the House and in the other body, and frankly there was a great deal of 
debate going on in this country over whether or not we should implement 
the North American Free-Trade Agreement, and many of our colleagues on 
both sides of the aisle regularly, and especially as members of the 
staff know here, stayed late at night to discuss whether or not we 
should implement the North American Free-Trade Agreement, and we all 
know that last fall, just before Congress adjourned on November 17, we 
had a very crucial vote here in the House, and by a very strong margin, 
Mr. Speaker, we passed the North American Free-Trade Agreement, 
something that had been envisioned since 1979 when Ronald Reagan first 
talked about it. It was an agreement that had been negotiated by 
President George Bush and was strongly supported by President Bill 
Clinton, demonstrating that we can, in a bipartisan way, work to create 
opportunities for U.S. export growth, and we can work together to bring 
down the barriers that tariffs pose for the free flow of goods and 
services.
  Well, Mr. Speaker, quite frankly there were many people during that 
debate last year who predicted gloom and doom. They predicted the 
demise of the free world as we know it. They predicted that the U.S. 
economy would fail dramatically, and, in fact, we found the opposite to 
be the case. There are many people who are pointing to the fact that 
over the past 6 months we have enjoyed economic growth. Many like to 
argue that it is due to the policies that President Clinton has passed 
as it relates to domestic economic items here. Quite frankly, if my 
colleagues look at the economic growth which the United States economy 
has enjoyed, it is in large part due to exports and, of course, the 
increase in exports which we have seen to Mexico.
  Now, Mr. Speaker, based on most analyses provided and the tragedies 
that we have witnessed in Mexico over the past 6 months, it would stand 
to reason that we would not have an increase in the flow of exports to 
Mexico, that in fact, even with the Chiapas rebellion, even with the 
very tragic assassination of Luis Donaldo Colosio, the presidential 
candidate of the Institutional Revolutionary Party, even with the 
economic turmoil which has existed in Mexico, we have seen, based on 
the data which we have received for the first 3 months of the year, 
exports to Mexico increased to a level of $11.8 billion from January 1 
through March of this year, and it seems to me that we need to realize 
that there has been what we described often during the debate a win-win 
situation.
  No one has worked harder on the issue of the North American Free-
Trade Agreement than the gentleman from Tucson, AZ [Mr. Kolbe], my 
colleague. I had the great privilege of working with him and the 
gentlewoman from Colorado [Mrs. Schroeder] who I am going to call on in 
just a few moments, but first I am going to call on my great friend 
from Tucson.
  Mr. KOLBE. Mr. Speaker, I thank the gentleman from California [Mr. 
Dreier] for yielding, and I appreciate his leadership on this, as I do 
the gentlewoman from Colorado who is one of the really hard workers on 
her side of the aisle last fall in this debate over the North American 
Free-Trade Agreement, and I especially appreciate the fact that the 
gentleman from California has taken this hour to essentially report to 
the American people, a very preliminary report we would have to admit, 
but to report on the progress that we have made since the enactment of 
the North American Free-Trade Agreement and since it went into effect 
on January 1.
  As the gentleman said, the preliminary data is very, very 
encouraging, and I think, as he said in his 1-minute teaser earlier 
this morning, he said that we would be talking about some of these 
figures and also reporting on some of the very specific cases that have 
been very successful.
  Let me begin with kind of from the larger to the more specific, but 
the gentleman used a figure that, I think, is very, very important. He 
talked about exports to Mexico at a figure, at a rate, of over $11 
billion, almost $12 billion in the first quarter. That translates on an 
annual basis into $48 billion.
  Now the first thing that strikes me about that is that that 15-
percent increase, that is a 15-percent increase, and two important 
points, I think, need to be made. First, that 15-percent increase puts 
us very close to supplanting Japan with Mexico as our second largest 
trading partner. Almost certainly, if that rate continues next year, 
Mexico will be a larger trading partner than Japan is in terms of an 
export market for the United States goods, and that, of course, means 
jobs here at home exporting goods to a country like Mexico as it does 
to Japan.

                              {time}  1100

  The second thing is that that number, that 15 percent, if that holds 
good for the rest of this year is an increase.
  Mr. DREIER. If I could reclaim my time, that 15 percent is the 
increase over the first 3 months of calendar year 1993, where we had 
already seen a tremendous surge in the level of exports that had taken 
place really since 1986 when privatization began. So exports were very 
positive in 1993, and we have seen nearly a 15-percent increase since 
implementation of NAFTA during the first 3 months of 1994.
  Mr. KOLBE. The gentleman is correct on that. That is what is 
important. You are looking at a 15-percent increase on top of what had 
been a very substantial increase in the year before.
  When you take that, if you extrapolate that to the entire calendar 
year 1994, and we believe that there will be a 15-percent increase over 
the entire year, you are talking about in the first year, in the first 
year of NAFTA, creating about 128,000 additional jobs in the United 
States directly related to the exports to Mexico. Because every 
economist agrees that each billion dollars of exports translates into 
about 15,000 to 20,000 jobs here at home. So we are talking about 
128,000 additional jobs. In the total labor market of the United 
States, that is not a huge amount. But it is an important addition when 
we are talking about finding new jobs and building an engine of 
economic growth.
  Mr. DREIER. The important thing to note here is as we look at what 
sectors of the economy we have seen the increase in exports in, it has 
been in electrical, machinery, paper, trucks, cereals, and other areas 
like that, all items which have seen a decrease in that tariff barrier 
as they have sought to export to Mexico.
  Mr. KOLBE. The gentleman is absolutely correct. I think that the 
content of the exports is a very, very important factor.
  Looking at another country, for example, in China, where we have a 
very substantial trade deficit, I think sometimes we miss the fact that 
there is a big difference between what we import from China, which is 
largely shoes, toys, some textiles, goods like that, consumer goods, 
and what we export to China, which is very large heavy equipment, 
aircraft, electronic goods, and equipment, software, computers, all of 
which are high-technology and require jobs at the very high end of the 
wage scale. So there is a very different content, job content, related 
to the exports versus imports. I know the gentlewoman from Colorado 
understands some of this.
  Mr. DREIER. I would be happy to yield at this time to another person 
who worked with us in a bipartisan way to implement the North American 
Free-Trade Agreement, my very good friend from Denver, Mrs. Schroeder.
  Mrs. SCHROEDER. I think both of you, because you worked awfully hard 
on your side of the aisle, and we worked hard over here. it is a very 
good idea that this be brought up just before we go home. Because when 
we come back, GATT is going to be front and center, and some of the 
horrible scenarios spun out on NAFTA are going to be spun out on GATT 
over and over again.
  There seems to be a lot of people, unlike us, who do not believe 
American business can compete and American business is as vibrant as we 
think it is. And the good thing about NAFTA is we have had this little 
display now to see that it did work, and we can expand it and we can go 
on, and it is exciting to see other countries such as Chile in the 
hemisphere wanting to have this expanded to them.
  I think it is win-win. I think it is a good example of how the 
American people win, if all of us can kind of come together and figure 
out these solutions.
  I thank you so much for being very courageous. I am sure on your side 
of the aisle it was not particularly popular to be working with the 
President of the United States.
  Mr. DREIER. We loved every minute of it.
  Mrs. SCHROEDER. You were working for the United States, as we all 
were. There is a great feeling of satisfaction that we can stand here 
and say that all the naysayers will probably bring out their same tune 
and play it again, but we hope people look at the facts rather than get 
scared by it.
  I wanted to join in and thank you both.
  Mr. DREIER. I thank my friend very much for that helpful 
contribution. It is kind of you to note on our side we want to 
encourage a spirit of bipartisanship, contrary to some of the arguments 
we often hear made as debate ranges on a wide range of issues.
  Mr. KOLBE. I appreciate the comments of the gentlewoman from Colorado 
because I think it does reflect the very strong bipartisan support that 
trade as an issue has in this body. We understand, those of us who 
advocate trade agreements, understand that trade is the engine of 
growth. Trade is really the future economic growth of this country.
  In that light I wanted just to make a comment based on the thoughts 
that were contained in an article that was about this surge of exports 
to Mexico.
  One of the officials of the AFL-CIO said well, yes, but. And the 
``but'' was look at how much more Mexican exports to the United States 
have grown.
  It is true that the first 3 months, while our exports grew 15 
percent, the Mexican exports into this country grew 22 percent. But to 
say yes, but, about that----
  Mr. DREIER. We have to remember there is still a trade surplus with 
Mexico. In the first 3 months of the year it is half a billion dollars. 
If you extrapolate that, that means for the entire year, we would have 
a surplus of $2 billion.
  Mr. KOLBE. One can almost say at the moment our trade is almost in 
balance. The point is that trade is not a win or lose situation. It 
does not mean that we are worse off because Mexico also got better off. 
We are better off by exporting 15 percent, or another $3 billion to 
Mexico in the first quarter of this year, and Mexico, of course, is 
better off. Frankly, American consumers benefit by the facts that 
tariffs have gone down and we have the option of buying goods and 
services from Mexico that were not available to us before, or were only 
available at a very high price.
  I think that is an issue that often gets forgotten in this trade 
debate, that in a two way trade, it is the consumer that benefits by 
having access to imports.
  Mr. DREIER. There is a perfect analogy which is extraordinarily 
timely, and I am excited that the American people are focusing on this 
issue. It is the World Cup.
  Now, on the Fourth of July, Monday, in Palo Alto, CA, Brazil and the 
United States are going to be playing each other in the World Cup. 
Brazil and the United States are going to be the sole two teams on that 
field when the World Cup match is played.
  Now, as we look at the issue of trade, there are people who like to 
say it is Mexico and the United States, and it is just the two of us. 
But we know that we live in a global economy, and in fact competition 
is wide ranging.
  Now, as my friend pointed to the fact there has been a 22-percent 
increase in the level of imports from Mexico, we have got to realize 
that that is something that has come about in competition not just with 
Mexico, but with the rest of the world. And many of those items which 
we have purchased are items which would have come from China, 
Indonesia, Singapore, and other countries in Latin America.
  So in the World Cup it would be, on the issue of trade, as if every 
single team in the World Cup was on the field playing, when in fact 
that is not the case when they are playing soccer. But in the global 
economy that we have today, that is the case.
  So as we benefit the United States consumer by increasing the flow of 
items from Mexico to the United States, it is coming about because of 
that diminution of tariff or tax barriers which exists between the two 
countries.
  Mr. KOLBE. The gentleman is correct. I think it is important to keep 
that point in mind, that the fact that there were these exports coming 
from Mexico to the United States did not mean that it diminished the 
United States production or United States jobs, that it supplanted 
United States production. It may have supplanted some of the production 
in another location, or, more importantly, it added to the total wealth 
within this country. It adds to the total wealth Americans have in 
terms of the products and services they are able to buy.
  In the meantime, we are benefiting because we are exporting more to 
Mexico and exporting more to other countries.
  Mr. DREIER. Many of our colleagues worked long and hard on the issue 
of the North American Free-Trade Agreement, and we had, as we were 
saying earlier, bipartisan support. But among the freshman Members who 
just came to this Congress within the past 18 months, Jay Dickey stood 
out as one who worked long and hard, took time on special orders, 
worked diligently to convince a number of his freshman colleagues and 
others to support the North American Free-Trade Agreement. I am happy 
to yield at this time to my friend from Pine Bluff.

                              {time}  1110

  Mr. DICKEY. I thank the gentleman from Claremont, CA.
  Mr. Speaker, I am excited about NAFTA and what we are seeing as a 
result because of jobs. As I have been told, 20,000 U.S. jobs are 
created upon an increase of each $1 billion in trade. We are estimating 
that in the year 1994 we are going to have a $7 billion gain in trade 
in Mexico, or with Mexico, and therefore, we are going to have seven 
times 20,000 United States jobs that are created.
  Mr. Speaker, some of this data that we have relates to various parts 
of our industry and exports. We have always been a supplier of United 
States-made motor vehicle body parts or radio and television parts to 
Mexico. Now, because of NAFTA, we can go and sell the completed car. 
The projection is from Ford Motor Corp. that they will export nearly 
25,000 cars and trucks to Mexico this year, which is 23,300 more cars 
than they exported in 1993.
  Wal-Mart of Arkansas, my home State, is going to provide 40 percent 
more United States-made products to its Mexican stores because of 
NAFTA. We also had the National Cotton Council of Memphis giving out a 
report for the first 3 months of this year, January through March, of 
an increase in cotton sales to Mexico to the tune of 62 percent.

  This region includes Arkansas, Louisiana, Mississippi, Tennessee, and 
Missouri. It makes up one-third of the Nation's cotton crop. We do not 
know what the others are doing, but we do know it is affecting us 
directly, particularly our farmers.
  The livestock and poultry commission in our State of Arkansas also 
reports that the poultry products are well on their way to increased 
exportation to Mexico. We anticipate increases not only in raw 
products; namely, broilers, but also finished products, such as the 
chicken and the TV dinners and entrees, as the tariffs come down.
  Mr. DREIER. If I could reclaim my time for just a moment to 
underscore a very important item that my friend, the gentleman from 
Tucson, AZ, [Mr. Kolbe], and I both would like to point to, that is 
Wal-Mart, based in the gentleman's State, and the tremendous increase 
that we have seen in the number of United States-produced goods that 
are being sold in Mexico. I should say that my friend, the gentleman 
from Tucson, and I on more than a few occasions had the opportunity to 
visit the largest Wal-Mart store in the world.
  Mr. KOLBE. The gentleman from Arkansas [Mr. Dickey] was on that visit 
when we visited the Wal-Mart store, and I know he would probably like 
to share some of what we saw there.
  Mr. DICKEY. Absolutely. It was fantastic.
  Let me tell you, if I may, what the Wal-Mart people tell me. They 
went down there thinking that the Mexicans would buy their products 
that they made a little better than they would buy United States-made 
products, so they put on the shelves the Mexican-made products, which 
supposedly were made in a cheaper fashion and they could reduce the 
prices.
  They could not get those things off the shelves, so they started 
moving in American-made products, selling them at the same high volume, 
low discount rate, and they could not keep the American-made products 
on the shelves.
  We saw that Wal-Mart that night. It was like an anthill, people 
everywhere. They seemed to know exactly what they were doing. It was a 
gigantic store and a tremendous, tremendous trophy to NAFTA.
  Mr. DREIER. The figures from Wal-Mart are phenomenal. It this 
article, which was in USA Today, it says ``Exports To Mexico Soar After 
NAFTA,'' and it has this amazing Wal-Mart figure in which it says 
``Wal-Mart has increased the percentage of United States-made products 
in its Mexican stores to 80 percent from 40 percent because,'' and Mr. 
Southerquist, the chief operating officer is quoted as saying, ``that 
is what the shoppers there wanted, were American-made products,'' 
exactly what my friend, the gentleman from Pine Bluff, has said, so a 
doubling of the increase of United States-manufactured goods that are 
on the shelves in Mexico.
  Mr. KOLBE. If the gentleman from California [Mr. Dreier] would yield, 
in the spirit of fairness and telling all the truth here, one of the 
problems we have had with NAFTA and the implementation has been trying 
to understand the new rules and regulations, in particular the new 
rules and regulations that have been imposed in Mexico on labeling.
  I think, Mr. Speaker, I would acknowledge that this last week, just 
this last week, that the Wal-Mart store was closed very briefly by the 
Mexicans because of failure to adequately or properly label some of the 
products. That is one of the learning things we are going through, is 
learning how, what is required in terms of product labeling in Mexico. 
It is a new law down there, and there have been problems, I think we 
need to acknowledge.
  The customs brokers tell me there have been problems trying to figure 
out new procedures for crossing at the border. All that is the learning 
process. It is the growing pains, if you will, of the new and growing 
trade relationship between our countries.
  Mr. DICKEY. Let me finish just one paragraph.
  Mr. DREIER. I am happy to yield to the gentleman from Pine Bluff.
  Mr. DICKEY. What I want to do is bring this into Arkansas, maybe Pine 
Bluff, AR. We produce soybeans in our area. We have been competing in 
the past with South America, which is a major soybean producing nation.
  What is happening is that we are now able to provide Mexico with 
soybeans with no tariff, where the South American countries must pay 
the tariff. We have been given an advantage in southern Arkansas and 
eastern Arkansas, we have been given an advantage, because the tariffs 
from the other competing countries are still in place and we no longer 
have them.
  I tell the Members, it is exciting. It is something that is really 
going to happen, and it is going to pay off. This effort that was made 
is going to pay off. I want to thank the gentleman from California [Mr. 
Dreier], too.
  Mr. DREIER. Mr. Speaker, we have been joined by one who voted ``no'' 
on the North American Free Trade Agreement, and I suspect may have seen 
the light. What he just said to me is that he wants to talk about the 
NAFTA in a positive way. I would be happy at this point to yield to my 
friend, the gentleman from San Diego, CA [Mr. Filner].
  Mr. FILNER. I thank the gentleman for yielding.
  Mr. Speaker, let me just say to the gentlemen who are here, as they 
know, I represent the border area between California and Mexico. I did 
not vote ``yes'' for NAFTA, but it is vital to my constituents that 
NAFTA works. It is vital that we be part of economic growth and 
economic vitality.
  I was pleased to hear the reports that the gentleman had today of 
some of the successes. I just wanted to make the Members aware that 
from my perspective sitting on the border, wanting to work with the 
Members to make it work, that we have to work to make sure that the 
infrastructure at the border is adequate to cover this advancing 
activity.
  For example, as Members well know, much of the trade between the two 
nations is still carried on trucks, and about 50 percent of the trucks 
come through one border crossing in San Diego, the Otai Mesa border 
crossing. There is no interstate highway that connects that border 
crossing with the rest of the highway system in America. It is just a 
city street now that is very dangerous.
  I have worked with the Committee on Public Works and Transportation 
to get that road declared part of the National Highway System. We got a 
little bit of money this year to begin to move forward, but we need, I 
think, Mr. Speaker, to have an infrastructure fund specially for the 
advancement of NAFTA.
  It is going to impose some burdens on our infrastructure, and if the 
successes that the gentleman has outlined here today continue, we are 
going to need that. This is a potential impediment. I hope to work with 
the gentleman to make sure that infrastructure is there.
  Mr. DREIER. Absolutely. I thank my friend, the gentleman from San 
Diego, CA [Mr. Filner], for his contribution. I have visited the Otai 
Mesa, and obviously there are infrastructure problems that need to be 
addressed, but frankly, as we see the increase of the flow of goods and 
services, we also want to get to the root of the illegal immigration 
problem not only by enhancing the economy of Mexico so people do not 
have to flee across the border, but by improving that infrastructure. 
As the gentleman has said, we clearly will create a situation that can 
enhance the ability for goods and services to flow across the border.
  Mr. Speaker, I will say to the gentleman that I have strongly 
supported efforts to improve the infrastructure in that area, and am 
committed to doing everything that I possibly can to do that.
  Mr. FILNER. Mr. Speaker, I look forward to working with the 
gentleman. I think we can be brought together on the two things the 
gentleman has mentioned, the advance in economics and the decrease of 
illegal immigration.
  Mr. DREIER. I thank my friend for also realizing that NAFTA is going 
to be a win-win for both countries.
  Mr. Speaker, I would like to further yield to my friend, the 
gentleman from Tucson, AZ [Mr. Kolbe].
  Mr. KOLBE. I thank the gentleman for yielding to me.
  Mr. Speaker, I would like to share with my colleague, the gentleman 
from California [Mr. Dreier], as well as others who may be listening to 
us here today, again before we get to some of the specifics that I 
think will be of interest to our listeners, to our Members, just some 
more macrodata.

                              {time}  1120

  KPMJ Peat, Marwick did a study not long ago, probably the most 
extensive study of American businesses about how they viewed NAFTA and 
what their response to it would be. They interviewed 1,036 business 
executives from mid-April to mid-May. They were all companies with 
gross revenues of at least $10 million or more in the area of financial 
services, health care, information and communications, manufacturing, 
retailing and distribution industries.
  Here are just a few of the things they said which I think are 
interesting, because these are the people on the front line deciding 
whether they are going to do business in Mexico or how they are going 
to do so. First of all, 60 percent of them believed that it would 
improve the U.S. economy, and at the same time that it would provide 
stability to the Mexican economy. Sixty-six percent believe that it 
would help their companies expand in the rest of Latin America. 
Interestingly, 40 to 50 percent, in other words almost half already 
conducted preliminary research and have taken steps to hire personnel 
who speak Spanish in order to take advantage of this growing market.
  Another couple of things are interesting. When asked where they plan 
to do their investment in the next year, 22 percent of them said 
Mexico. That is higher than any other country or region of the world. 
For example, 19 percent expected to do additional investment in Europe. 
Japan was only 9 percent.
  So we have a tremendous market, it seems to me, in Mexico that has 
been demonstrated by the confidence that these American businesses 
have.
  I would also just add one other little point. When asked would they 
move their business to Mexico or did they have any plans to do so, 86 
percent said they had no plans whatsoever to move any of their 
production or business down to Mexico, but were hoping to take 
advantage of the growing markets down there. I think this information 
is useful information.
  Mr. DREIER. That is very helpful. I appreciate the fact that my 
friend has pointed out the overwhelming support that is there and the 
successes which we have had.
  One of the other items that was raised throughout the debate on the 
NAFTA was the issue of the political instability that exists in Mexico 
and the problems of six decades of one party rule. One interesting 
assessment was provided by Nora Lustig who is an expert from the 
Brookings Institution. The point was made that in Mexico the fact that 
NAFTA was implemented helped to moderate the government's response to 
the Chiapas uprising and increase the pressure that the election, which 
we are going to be seeing on August 21, will be run in a fair and 
balanced way because there is a spotlight effect on Mexico.
  There were many who argued that President Salinas and others in the 
Mexican Government were supporting the NAFTA and wanted to look as if 
they were improving the human rights situation and other problems that 
existed there just to get it through when in fact, as we look at the 
first 6 months, while there have been as we all acknowledge serious 
problems in Mexico, there has been that spotlight effect on Mexico, it 
does appear that as the world has looked at it things have improved. 
Based on most every assessment that has come out over the past several 
months, we will see on August 21 a fair and balanced election.
  My friend from Tucson is planning to be in Mexico for the election on 
August 21. I wonder if he might have some thoughts that he might like 
to share on that.
  Mr. KOLBE. I appreciate the gentleman's comments and his question on 
that. I am hoping to be in Mexico during that time, if the schedule 
will permit, because I think it is very important that American 
political leaders see and understand the changes that are taking place 
in the Mexican political system.
  As the gentleman has correctly pointed out, it has been a very 
dramatic change down there. In past elections there was the total 
machinery of the election in the hands of one party, the PRI. They have 
made so many changes to the election laws this year that you can hardly 
keep up with them. There are, for example, several limits on the 
spending so that all of the parties have equal access to the media 
markets. They also have equal access in terms of being able to raise 
funds.
  The second thing that has been changed, and I think this is really 
very dramatic, is the new election rolls. They have been working on 
this for several years, but now every person has a card in their hand 
that guarantees them the right to vote, and they must have that card 
stamped, or they must have their finger stamped in order to vote. Once 
they do, they cannot vote again. That has been one of the problems in 
the past.

  They are going to select their poll watchers, the people that run the 
polls in every little precinct, in every little village throughout 
Mexico, or every little suburban area in Mexico City, they are going to 
be selected randomly by a draw from the registered voters in that 
particular voting district, or as we would say in this country, 
precinct. So there is no way that one party gets an advantage over the 
other. They are going to select them randomly.
  As proof I think of their strong desire to have a free and open 
election, the Mexicans are bending over backwards to invite foreign 
observers to see this election take place. In fact, I think they are 
hoping that the foreign observers will help to make sure that honesty 
is the byword of this election. So for a country that in the past has 
seen having foreign observers there as an infringement on their 
sovereignty, they are going to the other extreme, if you will, and 
inviting literally thousands of observers to come to that country. I 
have urged them for years to do this and said, look, we invite people 
to our elections from every country all over the world to come over and 
see how we do it. Maybe you can learn something from our elections, and 
we might learn something from the way Mexico has conducted this 
election. It is certainly going to be among the most modern in terms of 
technology in the world, and it far exceeds anything that we do in this 
country in terms of their polling lists, and the modernity and the 
updating of their polling lists and how updated they are. It is going 
to be a very technically oriented election, and I think we can probably 
learn something.
  There are three candidates, as the gentleman knows, and at the moment 
two of them, that is the government party candidate, the PRI which has 
been the presidency for the last 60 years in Mexico is running narrowly 
or slightly ahead of the candidate of PAN, which is the more free 
enterprise oriented party, the National Action Party. On the other 
side, the Democrat Revolution Party, the PRD, is, of course, led by Mr. 
Cardenas and that party is running very much third right now.
  Mr. DREIER. A very distant third.
  Mr. KOLBE. A very distant third. They are going to be the ones, of 
course, that will raise all of the questions and the charges about 
dishonesty in the election.
  I think what is the real news is that the PAN is running as close as 
they are today to the PRI.
  Mr. DREIER. What we often heard throughout the debate on the NAFTA 
was that there was a strong opposition within Mexico to the NAFTA, the 
two parties which are almost neck and neck, very close at the top, way 
ahead of the PRD candidate, Mr. Cardenas both strongly supported 
implementation of the North American Free-Trade Agreement, and those 
candidates are the ones who have gained the largest support base within 
Mexico.
  Mr. KOLBE. That is correct. And the PAN, the National Action Party, 
was very quick to support the concept of NAFTA. For years they have 
been arguing for a more open and freer trade, and they were very, very 
quick in responding to that.
  So in fact it is very hard today to distinguish between the PRI, the 
government party, the Party Revolutionary Internationale and the PAN, 
the National Action Party and their economic policies. So both of them 
are strong advocates of more open markets, freer trade and capitalism 
in Mexico, which I think is a very clear signal to the rest of the 
world of the economic direction of Mexico.
  Mr. DREIER. Mr. Speaker, we have spent the last 40 some odd minutes 
talking about the wide range of issues and concerns that were raised on 
this whole issue of the North American Free-Trade Agreement, ranging 
from the question of exports versus imports, the political situation, 
the problems that Mexico has faced, which we all acknowledge are still 
there.

                              {time}  1130

  I think that as we look at this issue we should take the next few 
minutes to be very specific about some of the marvelous success stories 
that exist as it relates to the NAFTA.
  Now, as we all know, some of the most virulent opponents to the North 
American Free-Trade Agreement stated as that debate raged last year 
that we would see the economies in the Rust Belt of the country 
devastated if NAFTA were to be implemented, all of the jobs because of 
businesses flowing to Mexico would be evaporating, and they said to 
people like the gentleman from Arizona [Mr. Kolbe] and to me that, 
``Yes, you come from the Western part of the United States, your States 
border Mexico, and you will have real improvement. But the rest of the 
country will pay the price from the implementation of the NAFTA.''
  So I would like to take a couple of minutes to start out by pointing 
to a few successes that exist in Ohio.
  Now, we know that some of the strongest opposition came from Members 
of the Ohio delegation, and for starters, as we look at the first 6 
months, the headline of this article, ``Chrysler Starts Shipping Jeeps 
To Mexico.'' In January, Chrysler began shipping its first Jeeps to 
Mexico. The company will ship about 3,800 Jeep Wranglers and Cherokees 
to Mexico from its Toledo, OH, plant in 1994, thanks in part to lower 
tariffs as a result of the North American Free-Trade agreement, that an 
article in the Journal of Commerce.
  The Jeep sales have also benefited suppliers to Chrysler who are 
spread throughout that region.
  Then there is an article in the Cleveland Plain Dealer, ``Axle Maker 
Sees Silver Lining From Jeep Exports.'' With the export of nearly 4,000 
United States-made Jeeps to Mexico, Toledo-based Dana Corp. now has to 
produce more axles for the popular vehicles. The chairman of the Dana 
Corp. indicated in December of 1993 that the company may even close its 
plants in Mexico and bring business back to the United States. Now, 
that is a little different than what we heard last year during this 
debate on the NAFTA.
  Then if you look also in Ohio, Cougar and Thunderbird production 
moves from Mexico to Ohio. The Ford Motor Co. announced in January that 
it plans to shift production of its Cougars and Thunderbirds from 
Mexico to Lorain, OH. Ford plans to build an additional 8,000 
Thunderbirds and Cougars this year in Lorain using current workers on 
overtime. A Ford spokesperson, who credits the NAFTA for the production 
move, said the company may also move its production for the Grand 
Marquis from Mexico to the United States. The company is holding to its 
assurance that NAFTA would create, not eliminate, U.S. jobs, and plans 
to hire 550 workers as it realigns its North American operations.
  Mr. KOLBE. If the gentleman will yield further, there is more in the 
automobile market. As a matter of fact, many of us argued during the 
course of the NAFTA debate that one of the first and greatest 
beneficiaries was going to be the automobile industry, because the most 
excluded product that we make in the United States, from the Mexican 
market, has been automobiles. That is because of what they call the 
auto pact that requires that for every car that is imported into 
Mexico, two have to be exported, and any car that is imported has such 
horrendous tariffs on, it made it impossible. What the companies were 
forced to do was go down there and build their production plants in 
Mexico in order to produce.
  Now we are going toward a rationalization. We are seeing astonishing 
results immediately, even though it is not for 10 years until all the 
tariffs and restrictions on imports of autos come off.
  Here is what happened with Chrysler and the export of Intrepids, 
Dodge Intrepids, to Mexico. This year they are going to export about 
2,500 Dodge Intrepids from their Newark, DE, plant to Mexico. Now, that 
does not seem like an awful lot, but it is an awful lot when you think 
that last year they exported exactly eight, eight Dodge Intreprids 
which were sent to Mexico. They are going from 8 to 2,500. That is in 
the first year.
  Each year those tariffs continue to come down. Each year the number 
of imports allowed into Mexico continues to go up, so there is going to 
be a tremendous boom, I believe, in that market. You are looking at 90 
million people down there, a growing middle-class market in Mexico. 
There is a tremendous opportunity.
  That is just what you cited, as with Jeep, as one example, and that 
is just another one. There are others in the area.
  Mr. DREIER. We have this litany of pages. If you look further in 
Ohio, Goodyear Tire hiring in Ohio due to Mexico trade; export 
consultants swamped by NAFTA interests; machinery producer sees gains 
in Mexican market. These are all items that have been in Ohio.

  Then in Michigan, and you may recall there were more than a couple of 
our colleagues from Michigan who often stood in the well and spoke in 
opposition to the North American Free-Trade Agreement.
  The headline and report for the Joint Automotive Governmental Action 
Council, and we have mentioned Chrysler, we have mentioned Ford. ``GM 
auto exports to Mexico booming under the NAFTA.'' ``Dow Chemical 
projects $34 million growth in exports to Mexico just in 1994.''
  Mr. KOLBE. If the gentleman will yield again, back on automobiles 
again, here in Indiana, a company called MascoTech, Inc., and actually 
it is a Michigan-based company, but they have bought a new plant in 
North Vernon, IN, to produce auto parts for the Mexican market, a huge, 
huge market in Mexico for automobile parts. They are going to be 
building wheel covers, spoilers, luggage racks, battery protectors that 
will be going to Ford and Chrysler plants in Mexico. They expect to 
sell some 4 million parts, auto parts, from its North Vernon facility 
to the two auto makers by 1995, all, 100 percent of it, due to the 
increased business with Mexico.
  Mr. DREIER. I am originally from the ``Show Me'' State. In fact, I am 
going to be spending some time there next week.
  As I look at Missouri, I look at a company with which I have been 
very familiar over the years based in Kansas City, MO, called Butler 
Manufacturing Co.
  Their firm is a supplier of specialty components, nonresidential 
construction services, and they project that their total orders will 
rise by 27 percent in the Mexican market. Part of the reason for the 
growth is that under NAFTA, Butler can charge its clients lower prices. 
Mexico's import duties on construction materials fell from 15 percent 
to zero under NAFTA, a benefit it can pass to its customers.
  Back in the United States, Butler is already increasing its 
engineering staff and expanding its manufacturing shifts to respond to 
increased production.
  And then another headline that was in the Saint Louis Post-Dispatch 
just a couple of months ago, ``Chrysler Picks Missouri, Not Mexico, As 
Site For The Ram Production.'' I guess that is one of their 
automobiles, I guess, the Chrysler Ram. I am not too familiar with that 
one. Obviously they are selling in Mexico, and they are being 
manufactured right here in the United States.
  Mr. KOLBE. If the gentleman will yield further, one case that 
includes my own State of Arizona is Honeywell. Honeywell, of course, is 
based in Minneapolis.
  Mr. DREIER. I thought we were not going to talk about our own home 
States here.
  Mr. KOLBE. It is not my home district, because they are located in 
the Phoenix area, but Honeywell expects to increase sales to Mexico 60 
percent in 1994; with NAFTA's more open government buying rule, they 
expect to sell more of the TDC 3,000 process control systems which are 
built in Phoenix to the Mexican oil company, and that is Petroleos 
Mexicanos, or PEMEX. They are also selling other equipment that is made 
in Albuquerque, made in Arlington Heights and Freeport, IL, so very 
important gains there.
  We have been talking a lot about big companies, Chrysler, Ford, and 
Dow and Honeywell.
  Little companies are benefiting, too. Let me just suggest a couple of 
them. One in San Rafael, CA, Panamax----
  Mr. DREIER. Thanks for covering California for me. I appreciate it.
  Mr. KOLBE. They are a small designer and manufacturer of surge 
protectors for high-technology electronics equipment. They have added 
15 to 18 employees just to meet the NAFTA-generated sales this year. 
They have added a bilingual sales staffperson to handle the calls from 
Mexico and Latin America.
  That, by the way, is a phenomenon we are seeing all over the country, 
and putting a tremendous demand on individuals graduating from high 
schools and universities that have language capabilities that can do 
business in English as well as in Spanish. So there is a tremendous 
need there. In fact, the language firm, just one other, and I will give 
the floor back to my good friend from California, called the Language 
Solution, a Burbank-based language instruction services firm, it is 
reaping the benefits of increased trade with Mexico. It opened an 
office last year in El Paso, to teach Spanish to local U.S. Government 
and business personnel. It has already won a contract with the local 
gas company as well as several other U.S. companies that have 
border operations, border facilities.

  It is selling more of its business in Albuquerque, where firms are 
asking for language-trained individuals. So there is an example of the 
spinoff of NAFTA in another area of language, a firm that is devoted 
specifically to that.
  And the list goes on and on, as the gentleman knows.
  Mr. DREIER. And it is going to go on and on right here, and to be 
evenhanded, I am going to talk about Florida. In Florida, and this was 
in the NAFTA News on April 25, Medical Equipment Maker Sees Jump In 
Sales To Mexico. Fort Pierce-based DeVilbiss/Pulsair, a medical 
equipment manufacturer, has seen exports to Mexico skyrocket over the 
last 2 years. The company expects sales to grow even faster under the 
NAFTA, which cut Mexican tariffs on medical equipment. Pulsair expects 
1994 sales of over 2,000 units, according to company vice-president 
Mark Novak, and here is what he said: ``With NAFTA's lower tariffs, 
market activity will increase, and sales have no way to go but up.''

                              {time}  1140

  Having said that, having referred to Florida, I yield to my very good 
friend, the gentleman from Sanibel, FL [Mr. Goss].
  Mr. GOSS. Mr. Speaker, I thank the distinguished Member from Laverne, 
CA.
  Mr. Speaker, in fact there is other good news in Florida, success 
stories about Florida manufacturing that have worked out very well. I 
want to congratulate the gentleman from Arizona [Mr. Kolbe] and the 
gentleman from California [Mr. Dreier] for taking this time. We are 
fulfilling a promise here, and I appreciate their leadership. We 
promised we would watch the situation with NAFTA very closely and that 
we would issue progress reports from time to time.
  I think that a lot of us took NAFTA a little bit on faith, the faith 
that American business can compete and win, and in fact that is exactly 
what is happening. We are being justified.
  I want to congratulate Mr. Dreier and Mr. Kolbe for their continued 
leadership, meeting the obligation, and satisfying the promises to keep 
monitoring and reporting back. I have to say that their are still some 
problems in some sectors, as Mr. Dreier knows and we have talked about. 
We are working them out. We are getting good response to work out 
problems with the tomato growers, for the child labor laws, pesticides 
and things like that. Progress is being made in troubled areas and 
success is being made in other areas.
  I would also like to say that someday I hope we are going to be able 
to have other markets as well. Places like Haiti come to mind. If the 
gentleman would indulge me for about 10 seconds, I heard the 
gentlewoman from Colorado [Mrs. Schroeder], who participated in this 
earlier, who referred to Haiti, saying it is a shame that we do not 
have other options for the situations in Haiti. I think she was 
referring to the somewhat critical statements I made earlier in the 
morning.
  In fact, we do have other options for Haiti than the administration's 
policy. Apparently the gentlewoman has forgotten that we have a safe 
haven solution that involved no embargo, provided humanitarian relief, 
and did not call for an invasion.
  So, either the gentlewoman has forgotten, simply forgotten, or as a 
member of the Armed Services Committee she was absent from the debate, 
but I do not think that is correct. So we have had concrete solutions 
offered that are better. And I hope those solutions will lead to better 
opportunity for NAFTA to come to Haiti and other places like that where 
they will profit and will profit.
  I thank the gentleman.
  Mr. DREIER. My friend is absolutely right. I thank him for his 
contribution and the diligent and very responsible way in which he has 
been dealing with the wide range of issues that affect this hemisphere. 
I know that he as a Floridian has been working specifically on the 
issue of Haiti. He underscores what truly is a goal of ours--that is, 
to create a hemispherewide free trade zone so that we can witness the 
free flow of goods and services throughout this hemisphere. I think 
that is a very important item which would again create a win-win 
situation.
  I would like to point to one more item, since I have had an 11:30 
appointment that I have stood up so far. The person with whom I have 
the appointment and was scheduled to meet happens to be from 
Connecticut. So I thought maybe I should point to one of the success 
items in Connecticut, and then I would further yield to my friend from 
Tucson. This is correspondence from a company based in Norwalk, 
Connecticut, named Perkin-Elmer. They are, as I said, based in Norwalk. 
They report that they have sold $550,000 in water quality analysis 
equipment to Medico under NAFTA. The company has sold $250,000 worth of 
atomic absorption spectrometers and $150,000 worth of gas 
chromotographs to Mexico's regional water laboratories. The firm has 
also sold an $80,000 inductively coupled plasma emission spectrometer 
and a $70,000 gas chromography mass spectroscopy system to the City 
Water Laboratory in Juarez. I wonder how they translate that in 
Spanish. Each sale also involves repeat business because the machines 
require replacing consumable equipment, such as light sources.

  That came out in an article just about 6 weeks ago on a success in 
Connecticut.
  I further yield to the gentleman.
  Mr. KOLBE. I thank the gentleman for yielding.
  Mr. Speaker, the gentleman was stumbling somewhat over those 
scientific terms. I do not know how it is translated into Spanish. I am 
not sure how the reporter is going to get it quite into the record 
here. But I know the gentleman has scientific background, and he knows 
it all and uses those terms correctly.
  Mr. DREIER. If I may interject, one of my best friends is a 
spectroscopist.
  Mr. KOLBE. The gentleman points out correctly that a lot of this is 
very high-technology scientific equipment that we are selling and a lot 
of it is also services.
  Let me also, in concluding my remarks here, mention one or two other 
items.
  I think it is interesting that Ace Hardware is planning to build a 
$26 million paint manufacturing facility in Texas as a result of NAFTA. 
They have said, reported their sales grew by 125 percent in the first 2 
months of this year as a result of taking the tariff off. I think that 
is one of the products where the tariff comes off immediately, 100 
percent of the tariff is reduced there. That is paint sales. They now 
have more than 1,000 jobs in the United States supported by sales in 
Mexico. They hired 25 workers in just the past couple of months to 
serve Mexico. All of these have been hired since the passage of NAFTA.
  But it is not just manufacturing. There are services which I want to 
mention.
  Integrated Cargo Management Systems, in San Antonio, produces high-
technology services for monitoring of trucks and cargo. They signed a 
letter with Mexico's Radio Beep SA de CV. That is the largest paging 
and messaging company in Mexico. They signed for the exclusive 
distribution rights. That is an example of the kind of thing that can 
happen with the passage of NAFTA.
  Let me finally just mention an insurance firm in Mississippi, 
Jackson-based U.S. Life Insurance Co. recently received approved from 
the Mexican Government to participate in the Mexican reinsurance 
market. That is a brand-new area that the United States have been 
excluded from entirely in the past, in the insurance and reinsurance 
market. There is a huge opportunity for U.S. firms. These are just a 
couple of examples. Let me, as I close my thoughts here, remember that 
we are really not talking just about names of firms, we are not talking 
about sales and dollars, we are talking about human beings, jobs, good 
jobs for Americans, for American men and women and for their families. 
That is what trade is all about. I know my good friend from California 
shares that vision of trade as the engine of growth for the United 
States, and that is why we work so hard to make sure that NAFTA becomes 
a reality. And I think that is why we stand here today with some 
justifiable pride and certainly some satisfaction, knowing that the 
efforts we put forth have literally, literally led to the creation of 
thousands of new jobs here in the United States for American workers. I 
know he is going to be a leader as he has been in the past on NAFTA. He 
was on NAFTA and he will be a leader in making sure that we have a good 
GATT agreement, and GATT-implementing legislation.
  I thank the gentleman for his contribution.
  Mr. DREIER. I thank my friend very much for the leadership role he 
has played in this issue of the NAFTA and will continue to work closely 
together on the MFN with China and the General Agreement on Tariffs and 
Trade and the wide range of trade issues which, as he said, create 
opportunities to benefit not only workers in this country but also the 
consumers who do see a real plus from the issue of free trade.
  Things are not perfect in this arrangement with Mexico and the United 
States. You will recall the package is to be phased in over a long 
period of time, 15 years. We are hopping to reduce that total phase-in 
period. We know there are very serious problems that continue to exist 
in Mexico today. But having said that, it is very clear from what we 
have discussed over the past hour and other evidence that has come 
forward the preponderance of information that has been provided 
demonstrates that breaking down tariff barriers, as was done with the 
North American Free-Trade Agreement, is a win-win situation. There is 
no benefit for the United States of America to have a poor southern 
neighbor. We want to help lift the economies throughout the world and 
we want to do it not with dramatically increasing, taking U.S. taxpayer 
dollars through foreign aid, but instead through trade. And that really 
is the key to growth in the United States and in the other countries.
  Mr. Speaker, with that, I would like to extend best wishes to our 
friends and colleagues, all those who work here in the Congress, for 
the next 10 days as we embark on our Independence Day district work 
period.

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