Congressional Rebuttal in Defense of NAFTA
The author offers a new charge against reducing trade barriers through the North American Free Trade Agreement (NAFTA) in the article "Free Trade Brings High Tax," May 18. His point that it will result in enormous cost to the federal government is a new but weak arrow in the quiver of those who have always opposed NAFTA.
The Congressional Budget Office estimates that tariff revenues will be $800 million a year lower in 10 years with NAFTA than they would be with our current tariffs. Thus, the "enormous" cost of NAFTA in lost revenue will be but a tiny fraction of all federal revenue in 2003, if we do not raise taxes in the next 10 years!
Those who make this "enormous cost" argument miss the point that free trade is our primary engine for economic expansion, and that means more tax revenue. NAFTA promises a net increase of somewhere from 400,000 to 4.5 million new jobs over 10 years. Even if we take the lower estimate, the increased economic activity spurred by NAFTA will result in at least $5 billion annually from federal income and wage taxes.
Not only will the defeat of NAFTA hurt United States consumers and workers, it will also throw away billions in new federal tax revenues. Rep. David Dreier, Washington (R) of California
In the May 18 article, my colleague misses the proverbial boat in hinting that he has discovered some plot behind the border states' support of NAFTA. He insinuates that the real reason for our support of NAFTA is to spend federal dollars from the Treasury for what he contends are unneeded investments in infrastructure along the 2,000-mile US-Mexico border.
Let me assure the author that we know all too well that the real benefits to our region of a good free-trade agreement are going to be the hundreds of jobs created and the new dollars that will flow back and forth across the border. In fact, we feel strongly that the entire country can benefit from more prosperous trade with Mexico, and so our argument for more investment in roads, bridges, and runways is made with even Ohio in mind.
Studies show that thousands of jobs have already been created in Ohio, Pennsylvania, New York, and other Northeastern states as trade with Mexico explodes. In a few short years, President Salinas's policies have helped turn a trade deficit with Mexico into a $6-billion-a-year trade surplus. Mexico is expected to import another $20 billion in goods in the next five years, 80 percent of which will come from American companies.
What we seek in the border region is to be an active participant in the economic development that will be spurred by increasing trade with Mexico. We have already seen some of the economic benefits of a growing Mexican economy as retail sales surge and unemployment drops in El Paso.
Our improving economy is proof to the entire nation that it is not in the best interest of the border, of Ohio, or even Canada to keep Mexico poor and encourage mass migration and poverty on our side of the border.
Any investment the federal government can make in assisting us in developing trade is a good investment for even the author's constituent taxpayers, who like it or not pay taxes that support the two-thirds of border residents who live in poverty because they cannot find work.
An investment we make today in replacing the handouts with paychecks is as good a deal for the author's constituents as it is for mine. I'm sorry to disappoint my anti-NAFTA colleagues, but the wish list in my pocket could never be fulfilled by the federal government. However, we could check items off the list quickly if we will encourage trade with Mexico and border economic development that will raise the standard of living for an area of the country that so desperately needs it. Rep. Ronald Coleman, Washington (D) of Texas
