[Congressional Record Volume 141, Number 12 (Friday, January 20, 1995)]
[Extensions of Remarks]
[Page E142]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page E142]]
                THE DEVALUATION OF THE MEXICAN CURRENCY

                                 ______


                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                        Friday, January 20, 1995
  Mr. CRANE. Mr. Speaker, in recent weeks opponents of the NAFTA have 
tried to use the devaluation of the Mexican currency as a way to revive 
their efforts to undermine this historic trade initiative. To be sure, 
the devaluation of the peso is of great concern to our country because 
of the economic dislocation it is causing in Mexico. The devaluation 
will have the unfortunate effect of raising the price of United States 
exports to Mexico, and will tend to reduce the trade surplus the United 
States built up with Mexico during 1994, the first year of the NAFTA.
  The current situation facing Mexico is unfortunate, but the United 
States has a strong interest in helping Mexico weather this downturn in 
its economy. The United States shares a 2,000-mile border with Mexico 
and our economies are closely linked. Total trade between the United 
States and Mexico is in the range of $70 billion a year.
  Without NAFTA the current economic situation would be much worse for 
U.S. businesses and workers. As a comprehensive bilateral free-trade 
agreement, NAFTA obligates Mexico to solve its economic crisis in ways 
that ensure that United States products and services will not be shut 
out of Mexico's market. In the past it was not unusual for Mexico to 
try to address its currency problems and fiscal difficulties by 
nationalizing banks and other industries, and otherwise closing the 
Mexican market to United States goods and services. Because the NAFTA 
obligates Mexico to maintain an open market, the agreement will serve 
as a stabilizing force to minimize the effect of Mexico's economic 
problems on the United States.
  United States trade policy towards Mexico as symbolized by the NAFTA, 
helps to steady a volatile situation for U.S. businesses and workers. 
NAFTA ensures that President Ernesto Zedillo will address the current 
situation through greater, not less liberalization of the Mexican 
market. NAFTA is by no means a cure-all, but it is a highly 
advantageous agreement for U.S. workers and businesses in this current 
climate of uncertainty in the economy of our southern neighbor.


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