Leading Article: Trade deal the US should not shirk

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The Independent Online
WHY, Bill Clinton must be asking, is it proving so tough? The United States would undoubtedly benefit from free trade with Mexico and Canada. A few American jobs would be destroyed by the creation of the North American Free Trade Area (Nafta), but barely a significant number in the grand scheme of things. Wages in Mexico, at one-eighth of the US level, are certainly cheap; but that is because Mexican productivity is only a fraction of that of American workers. The Mexican economy, one-twentieth the size of the combined US and Canadian economies, is a mere herring by comparison with the Canadian cod and the Yankee whale.

Add in the trouncing that Vice- President Al Gore gave to Ross Perot in their televised debate on CNN last week, and the presidential carrots that Mr Clinton is able to dangle as he buys votes for the pact in the House of Representatives, and it is tempting to wonder why today's vote in the lower house of Congress remains impossible to call.

In fact, the reasons behind Mr Clinton's difficulties are largely political. It is always easy to identify a company or individual standing to lose from competition; with the larger gains spread more thinly across the country, supporters are less vociferous. Hence the 'politics of negativism and fear' that Mr Gore identified on the Larry King show, and hence the hysteria of the lobbies headed by Mr Perot with his ill-informed populism.

A European perspective can offer good reason to vote in favour of Nafta. In doing so, it would set a precedent for free trade between a rich and a poor country that would help the European Union to open its markets to the former Soviet satellites to the east, and Japan to deal more fairly with the various tigers and dragons of east and South-east Asia. It would also give an impetus to the faltering Gatt negotiations, the successful conclusion of which this winter would bring greater prosperity to the entire industrial world.

These reasons aside, only one argument can convince Americans that Nafta is in their interests. Competition from the south is certainly a threat to those American workers who cannot function more productively and learn new skills more quickly than Mexicans. Yet the great strength of American business - and indeed American society - is exactly its ability to respond confidently to change; to dream up new products to suit new consumers, and new solutions to suit new problems. If that capacity has been lost, then the rejection of Nafta will be only a symptom of wider decline.