Making a hole in Mexican border

Ever since the North American Free Trade Agreement went into effect in 1994, some economists and political commentators have held that such an accord wouldn't stop at a free exchange of goods, services, and capital.

NAFTA, the argument goes, set in motion an economic integration that at some point will bring down the borders limiting the free movement of people, too, creating an open labor market.

As within much of the European Union, freely migrating for a job and economic betterment within the NAFTA area would no longer be illegal. To show how that might work, some advocates are calling for a test case along the US-Mexico border, eliminating the barriers between El Paso, Texas, and Ciudad Jurez.

Heightened US sentiment against free trade with Mexico, along with increasing vigilance against illegal immigration and drug smuggling on the US Southwest border, might make any move in that direction seem even less likely than five years ago.

And some specialists reject the idea that a free-trade agreement inexorably leads to free-labor movement.

"NAFTA inevitably involves a deepening of all kinds of relations among its members, but necessarily free-labor movement? No," says Sidney Weintraub, a NAFTA expert at the Center for Strategic and International Studies in Washington. But with the US unemployment rate at record lows and many job markets tight, some experts are talking about a coming need for more workers.

And the topic continues to pop up in Mexico. Most recently, a front-running contender for the 2000 presidential race, opposition governor Vicente Fox, argued for a NAFTA labor market during a May visit to Washington.

"I think we're going to see labor movement, or immigration, in the [2000] elections on both sides of the border, though perhaps from very different perspectives," says Jorge Bustamante, an expert in US-Mexico affairs at the Colegio de la Frontera Norte in Tijuana. "The Pat Buchanans of this world use the idea of an invasion from Mexico to ... push the Republican Party to the right, but the underlying issue is free trade and where that leads."

Mr. Bustamante, a strong critic of what he considers the US labor market's exploitation of foreign undocumented workers, says he agrees with both Mexican and US officials who argue that the wide wage gap and other disparities between the two countries rule out any short-term opening of labor markets.

But he also believes such an opening will eventually take place, so he advocates experiments to help gauge the impact. His proposal: Create a "laboratory" in sister cities Ciudad Jurez and El Paso. The 600,000 freight carriers, 15 million cars, and 5 million pedestrians that cross the Rio Grande into El Paso annually would do so as freely as anyone crossing New York's East River.

The idea is supported by a variety of business leaders in El Paso, while some economists warn of the impact such an opening would have on El Paso's already low average wages and high unemployment rate. Other analysts question whether the two cities really want to become so close.

"People in El Paso believe the border should be seamless, [that] it would be beneficial for both communities," says Tom Thomas, senior vice president for economic development at the El Paso Chamber of Commerce. "We have $24 billion in goods moving back and forth between El Paso and Jurez, we have workers coming north and workers going south. The way the bridge traffic moves it stifles trade and causes a lot of pollution," he says, "so it makes a lot of sense" to open up.

More than 30,000 El Pasoans work in Jurez, mainly as managers or skilled laborers in the city's mostly American-owned maquiladoras, or assembly plants. Estimates are sketchier of how many people from Jurez work in El Paso.

Tom Fullerton, a regional economist at the University of Texas at El Paso, says it makes sense for the two cities to move toward greater integration.

"They're already highly complementary economies," he says. But he says a "seamless border" only makes sense when labor codes and business regulations in the two countries are "in sync."

Mexico's problem is a rigid labor code that discourages job creation, he says, not the US border. Referring to presidential candidate Fox's call for free labor movement, Mr. Fullerton adds, "Essentially, Governor Fox is arguing that the US, with a largely deregulated labor code, should take on the surplus of an over-regulated labor market."

Others point to the dampening effect an open border would have on El Paso wages. "We're on a wage cliff here," says Victor Grado, corporate economist with El Paso Electric Co. Most El Paso workers earn in an hour or less what workers just across the river earn in a day. "We'd have a huge influx of people looking for better-paid work here," Mr. Grado says.

And not everyone south of the border assumes that movement would be good for Mexico. "Generally the idea of moving toward fewer barriers is good for both sides, but we also run the risk of losing much of the higher-skilled work force we are developing here," says Julio Csar Morales, an economist at Ciudad Juarez Autonomous University.

Still, many El Pasoans see an opening up of the two cities as inevitable - even though it raises issues economists and business leaders might not have thought about. "Sooner or later these will have to be declared open cities, you just can't have the level of commerce and exchange we have with a few bridges holding everything up," says Leon Metz, an El Paso journalist and historian.

But he guesses a lot of El Pasoans would at least initially oppose the move. He also says a lot of other issues would have to be worked out, like what laws would prevail in this new binational city, what nationality its babies would carry.

"Then of course if you put the immigration checkpoints on the outskirts of town, what about the American citizens who live just beyond but are coming into El Paso?" wonders Mr. Metz, looking ahead. "They're going to feel like foreigners in their own land."