NAFTA Would Be Crown for Mexico’s Economic Miracle-Maker
MEXICO CITY (AP) _ President Carlos Salinas de Gortari, the free-market visionary who engineered Mexico’s economic miracle, awaits a U.S. verdict today on a trade agreement that would be his crowning achievement.
Salinas, who has led Mexico out of the economic ruins of the 1980s, and 85 million compatriots will know by this evening if the U.S. Congress has ratified the North American Free Trade Agreement.
That vote could determine the continued success of the bold reforms Salinas consolidated after taking office in 1988, privatizing hundreds of inefficient state enterprises while throwing a once-protectonist economy wide open.
″We have had the Mexican revolution, and this could now be the dawn of a trade revolution. This is a decisive moment in our history,″ said Mexican political commentator and novelist Homero Aridjis.
″If the North American Free Trade Agreement is signed, Mexico will fully enter into the 21st century in 1994.″
The mood here was upbeat in the hours leading up to the vote. Most were certain the accord would be approved.
″Salinas’ reforms have been very good and they will continue under the free trade agreement,″ said 20-year-old Gerardo Villagran, who sells electrical appliances at an open-air market in downtown Mexico City.
″The market is going up this week because everyone’s sure the treaty will be approved,″ said university student Miguel Rivera.
At stake is the world’s largest trade zone - 362 million consumers across Canada, Mexico and the United States, scheduled to go into effect Jan. 1.
With a combined output of $6 trillion in goods and services, the North American free trade zone would best the $4.2 trillion Gross Domestic Product of the 12 European Community nations and pose a formidable challenge to Asia.
That would be a victory for Salinas, the Harvard-trained economist pivotal in transforming an inward-looking nation into an open, flexible trading partner that boasts the world’s 13th largest economy.
″One is struck by how much has been done,″ said Stephen Potter of the Organization of Economic Cooperation and Development, the Paris grouping of 24 wealthy nations now considering Mexico as its first Latin American member.
Salinas is credited with boldly advancing reforms begun in 1986, when Mexico joined the General Agreement on Tariffs and Trade, or GATT. Tariffs of up to 100 percent were slashed to about 11 percent on average.
NAFTA would erase most remaining barriers to trade among the three North American neighbors over 15 years.
Under Salinas’ reforms, the technocrat slashed red tape, overhauled investment laws to raise nearly $36 billion in foreign capital investment and tamped 51 percent annual inflation to 11.9 percent last year.
After years of negative growth, he got the Mexican economy growing again at a rate of 3 percent a year, a rate forecast again for next year after a lull blamed on a worldwide slowdown.
But Salinas, who cannot succeed himself when his six-year term ends in December 1994, is not pegging all his hopes on NAFTA.
He said that whether it passes or not, he will push ahead with reforms that have seen the state telephone monopoly, banks and airlines sold, and real wages increase 14 percent since 1988.
″Our development does not lie outside the country, but rather in our own efforts: in savings, productivity and quality,″ Salinas said in his annual State of the Nation address Nov. 1.
Salinas’ desire to lift Mexico into the ranks of the developed world will be a daunting challenge.
About 14 million Mexicans are classified as ″extremely impoverished.″ More than 20 million others are struggling to meet basic needs.
Still, many Mexicans place high hopes on Salinas and the trade agreement.
Said student Rivera, ″Even if the trade treaty doesn’t pass, the economy will remain open and we will trade with Germany, Japan and other countries.″