WASHINGTON--The success of the North American Free Trade Agreement, now three years into its 15 year implementation schedule, can be seen not only in the positive economic returns, but also in the important precedent it has established for advancing U.S. interests in trade agreements, according a new report from the Progressive Policy Institute.

The report, entitled The NAFTA Success Story: More than Just Trade, comes as Congress turns its attention to trade issues by taking up President Clinton's request for fast track trade negotiating authority. The report's author, Rebecca Reynolds Bannister, a fellow at the Progressive Policy Institute and director of the Latin America Data Base at the University of New Mexico, demonstrates how NAFTA, while a modest economic success, has met or exceeded its other wide-ranging goals.

"NAFTA is an important and solid agreement [that] protects the interests of U.S. employers and investors and those of our trading partners," Bannister writes. Pointing specifically to the boundaries it establishes for behavior in the global market and the rigorous rules it sets for governing trade--standards higher than in any previous agreements--she says, NAFTA should serve as a template for extending these principles to other key markets. "These features of NAFTA don't just safeguard U.S. businesses; they protect the innovation of American workers, processes and markets that provide employment for our workers."

As an added benefit, she writes, "NAFTA has introduced to Mexico important principles of transparency, the right to appeal government decisions, public access to information (about trade, labor, the environment), and a number of other issues that make up the foundation of an open, pluralistic, and democratic society."

"It is clear to objective observers that NAFTA is working," Bannister writes. As evidence, she points to these facts:

• Trade and investment throughout North America have increased.
• North America's economic growth as a region is projected at 3.5 percent in 1997, compared to the average 2.7 percent growth rate for the rest of industrialized nations.
• U.S. exports to Mexico and Canada are at record levels ($191 billion in 1996).
• Canada and Mexico are the top export markets for the United States.
• Trade and investment disputes are handled with relative transparency and according to established procedures agreed to in NAFTA.
• Small businesses as well as large firms have been given secure market access as well as methods for resolving commercial disputes under NAFTA.
• NAFTA to date has not produced a flight of investment or jobs; in fact, the United States economy now creates in approximately one month the total number of jobs lost due to NAFTA in three years.

"These changes make the obvious point: economic reforms symbolized by NAFTA have indeed been accompanied by a process of significant political reform in Mexico. It is fair to argue that the transparency and openness to outside scrutiny and influence that came with NAFTA contributed to the political opening."

The report calls for congressional approval for federal funding for improved trade data so that the anecdotal success and horror stories that pervade the discussion of trade today will be replaced by improved employment statistics for traders on a state and sectoral level.

Finally, the report addresses the widespread apprehension regarding employment security that exists in the U.S., despite record employment levels and low inflation. The Progressive Policy Institute has long advocated increased public investment in human capital and proposed innovative solutions to the education and training needs of American workers. The report recommends that individuals be given the power to control their own employment destinies with voucher-supported training and more meaningful adjustment assistance.

The report, which also contains specific information on the automobile, computers and software, textile and apparel, government procurement, agricultural, and services sectors, is available on the DLC web page or by calling the PPI press office at (202) 547-0001.
 

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