Shall We Look Back or Ahead? : If we reject NAFTA, we abdicate our role as leader of hemispheric trade--and squander a profitable market.

As Congress begins to decide the fate of the North American Free Trade Agreement, the Western hemisphere must wait to see whether the United States chooses to enter the 21st Century as a leader of the new economic order or to languish in the protectionism and isolationism of the past.

History will not be kind to the NAFTA naysayers, the neo-Luddites of the 20th Century. Just as the Luddites destroyed machinery, intent on preventing the Industrial Revolution, NAFTA opponents naively believe that domestic laws can control capital’s insatiable thirst for expanding markets.

Ideologues from the left and right continue to perpetuate their analysis of NAFTA on mythology and conjecture: the stereotype of the poor and uneducated Mexican, living victimized by vicious American capitalists; in a country with no economic future without the benevolence of U.S. investment.

Despite these prejudices, Mexico and countries farther south may hold the answer to maintaining growth in the skilled sectors of U.S. industry. Most Americans fail to recognize the tremendous economic advances in Mexico in the last 10 years. Mexico has survived a debt crisis, withstood three major devaluations of the peso that caused inflation to top 100% in 1986 and witnessed the collapse of its stock market in 1987. Mexican leaders developed an economic stabilization policy that has opened Mexico to foreign markets, reduced the government’s role in state-owned companies, and has controlled hyper-inflation through the Economic Solidarity Pact. The result is that Mexico has positioned itself as one of the most desirable countries for foreign investment.

At the same time, Mexicans need certain products that require the advanced technology and skills of high-wage employment sectors and are largely produced by American, European and Japanese workers. Indeed, it is in those highly skilled sectors--insurance, telecommunications, industrial machinery and pharmaceuticals, for example--where workers will be net winners from NAFTA.

NAFTA naysayers like Patrick Buchanan and Ross Perot may reflect the interests of the labor aristocracy who have relied on sheltered markets to maintain their positions. But they do not represent most American workers, who must compete daily for their jobs. These dangerous “leaders” rely on mythology and the internalized racism of American workers who know little of Mexican workers. The long-term goal of NAFTA is to increase the per-capita income of all workers through better use of each country’s resources, not to protect special markets that exist due to political lobbying. Job loss in inevitable in a market economy where production advantages on will weed out inefficient firms and new technology will make workers redundant. With these often violent changes in the economy, however, new systems and new relationships evolve.

The challenge for U.S. workers today is to look beyond stagnant markets and target sectors where America’s global competitive advantage is assured. And the challenge for workers in the 21st Century will be to maintain their position in a labor market that requires high productivity for their high wages.

As workers in the U.S. auto industry learned, sheltered markets do not guarantee employment and wages in a global market. If we are to learn anything from the debacle of the American automobile industry, it was that Japanese auto makers were more competitive not because they paid lower wages but because of the efficiency of their labor and the quality of their output. From an investment viewpoint, wages have no meaning without measuring productivity, and high productivity comes from a skilled work force combined with capital.

The loss of NAFTA would have long-term implications for American credibility as a trade partner for Latin American countries. These countries cannot afford to risk their growth on the antics of politicians who have the power to stop a foreign-trade initiative that was started under a Republican Administration and completed by a Democratic Administration. Many of these countries have removed both tariff and non-tariff barriers to stimulate trade in anticipation of NAFTA as well as in anticipation of the success of the broader General Agreement on Tariffs and Trade negotiations.

The United States should be at the forefront of this hemispheric trade policy. Today, our choice is to move forward to meet our future as a leader in world trade or to relinquish our role to others who will take our lead into the 21st Century.