First let me state that I am a strong proponent of free trade. True free trade is necessary and beneficial in a world economy. Opening new markets for our goods and technology should be a priority in any economic strategy. However, true free trade requires fair and equitable treatment between the parties involved. 

The current North American Free Trade Agreement (NAFTA) does not meet that criteria. This NAFTA does not enhance or strengthen our national economic goals of improving the standard of living or benefiting our need for more jobs with livable wages. 

The United States leads the world because of our economic might, not military might. This agreement would put more downward pressure on American jobs and our standard of living. We are a community in a larger one. We do play a role as a leader, but it does not have to be at the cost of our citizens. 

It is not isolationism or selfishness for us to make sure this agreement benefits us as well as Mexico. By promoting more open trade with Mexico we will stimulate investment in their country. It is easy to see why their government is in favor of this agreement. With a common border they are a natural market for our goods. With economic improvement they would be an excellent trade partner. I want a healthy Mexican economy, but not at our expense. 

Mexico's government mandates both the minimum and maximum wages. Wages are kept artificially low because the government wants the short‑term benefits of business investments for their cheap labor. In order for the Mexican people to become good consumers of American goods they must see their wages increase. Their low wages also put pressure on American wages as companies look south of the border to save on labor costs. 

With or without NAFTA companies are already going to Mexico for cheap labor. However, a NAFTA done right could be a force for progress. It could increase growth and opportunity for all the countries involved. It could develop into a hemispheric trading bloc that could compete worldwide. 

Does this NAFTA ensure that while companies are attracted to Mexico's louver wage structure we have done all we can to eliminate their artificially low wages. The answer is no. In fact this agreement is actually worse. This agreement supersedes labor laws already in place. Mexico actually has constitutional rights for its workers that include the right to strike and family and medical leave. However, they do not enforce them. This agreement would nullify them rather than encourage their government to better enforce them. 

The argument from proponents now always turns to long‑term benefits. Where is the proof? If we look to the Maquiladora region, which is where all our U.S. companies are going for the cheap labor, wages have fallen. The government of Mexico has made it clear that they want to keep their low wages to encourage more investment for the time being. 

Low wages are not the only advantage for Mexican workers. Environmental protection laws in this country have gone a long way to balance the needs of future generations and short-term economic gains. We understand that environmental protection can be seriously damaged in pursuit of economic prosperity. 

Again, Mexico's laws on environmental protection look quite good on paper. However, the best laws unenforced are no laws at all. NAFTA provides no enforcement mechanism with accountability. NAFTA provides no funding for the immediate border clean‑up that is necessary. 

The Maquiladora region is filled with U.S. companies that have sought lax environmental enforcement. The American people would never stand for the working conditions and harmful pollutants that are common in the maquilidora region. 

We must also address one of the least discussed factors of integrating an economy: the cost factor. Estimates range from $30 to $40 billion over the next ten years. Lessons can be learned from the European Community. This year alone they will spend $25 billion on transition needs. It should be understood those costs are among countries with comparable living standards. 

This NAFTA has no funding source for these costs. Suggestions such as cross‑border fees have not yet been discussed. The costs of NAFTA cannot be allowed to compete with the needs of crime prevention, education, healthcare and others. 

In conclusion, let me state that I want the political and economic reforms of Mexico to continue. I want a Mexican economy that improves the living standard and consumer consumption. However, this agreement isn't sound. Our economy isn't ready for the problems it will exacerbate: more job loss in manufacturing, declining wages and more difficulty in creating jobs with benefits such as health care. We must have stronger economic footing ourselves to compete against lower wages and sub‑standard environmental protection standards. 

We should go back to the drawing board on this NAFTA. In that time we should let the economic reforms in our country work restoring growth and opportunity. We should put in place a comprehensive training program that would answer the needs of workers who are displaced in their jobs. 

The debate will continue on economic theories of merit. As a public policy maker I am more interested in the realities. The realities of this NAFTA are too costly in these economic times. Until we can assure our people of their economic security we should not be involved in promoting immediate living wage job losses to another country.


This quarter's special report is an executive summary of a presentation made by State Representative Stan Gruszynski. The views expressed are those of Representative Gruszynski and do not necessarily reflect those of the M&I Corporation, the Central Wisconsin Economic Research Bureau, or the University of Wisconsin‑Stevens Point.