The basics of NAFTA

WASHINGTON -- The basic facts of the North American Free-Trade Agreement have taken a back seat to the rhetoric flung out by warring sides in the fight leading to its do-or-die showdown Wednesday in the House of Representatives.NEWLN: Here are some of those essential elements:

NAFTA would create the world's largest trading bloc, bringing together three nations and 370 million people.


The accord was engineered under former President George Bush, who unveiled the huge document in August 1992.

Before leaving the White House, Bush signed the treaty, along with his counterparts in Mexico and Canada.

President Bill Clinton supported the basic pact but sought, and obtained, amendments designed to offer greater protection to the environment and U.S. jobs.

Congress must approve NAFTA. Strong opposition to the accord lies in the House and the vote there is a cliffhanger. If the House gives its nod, the treaty will be sent to the Senate, which generally favors the pact.

But even if Congress approves NAFTA, another sticking point remains: Canada elected a new prime minister last month, Jean Chretien, who has vowed to amend the document. The Clinton administration responded by saying it would not renegotiate the proposed accord.


Barring all obstacles, NAFTA would go into effect Jan. 1.

Over 15 years, the pact would phase out the special fees called tariffs the three nations assess on each other's goods.

Right now, U.S. tariffs on Mexican goods run about 4 percent. Mexican tariffs on U.S. goods average 10 percent. The United States and Canada all but eliminated tariffs on one another's products in an earlier pact.

The pact would also increase opportunities for businesses to invest in each other's countries.

Beyond the basic facts comes foretelling of what the pact will do in coming years. Supporters and opponents have different forecasts.

Supporters include Clinton, each former president, 12 Nobel Prize- winning economists, most governors, most senators, hundreds of business executives and some environmental groups.

Opponents: businessman Ross Perot, civil rights leader Jesse Jackson, consumer advocate Ralph Nader, political commentator Pat Buchanan, House Majority Leader Richard Gephardt, House Majority Whip David Bonior, organized labor and some environmental groups.

Supporters say the pact would create 200,000 net jobs and protect 700,000 jobs dependent on the current flow of U.S. exports to Mexico.

Opponents say up to 500,000 jobs would be lost as U.S. firms relocate to Mexico to take advantage of cheap labor. NAFTA, they say, would make it easier to relocate.


Supporters say nothing precludes such relocation now, and that the accord's promise to eliminate tariffs would be an incentive to stay north of the border rather than shift southward.

Supporters say the following industries would benefit from NAFTA: computers, telecommunications, financial services, automotive, farmers.

Opponents say these industries would suffer: auto, electrical machinery, clothing, food processing, furniture.

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