Taking Advantage of Low Wages

S. market from there. The final compromise, which required 62.5 percent North American content, disappointed the big three automakers in the United States. Ford Motor Chairman Harold A. Poling was concerned mainly because the agreement did not need 65 percent automotive rule of origin.

Mexican negotiators also resisted U.S. pleas for much less restrictions on Mexico's energy market. Yet U.S. economists are in accord that the final agreement, that will enable U.S. and Canadian companies eventually bid for 70 percent of procurement by Pemex, the Mexican state-owned oil monopoly, was far more generous than expected.

Other analysts nation that NAFTA could further a trend toward rival regional economic trade blocs, simply because some Japanese businesses that had been operating in any from the 3 nations involved within the pact will almost certainly be discriminated against. However, doing a North American marketplace which can effectively compete against Europe and Japan was the major impetus behind NAFTA. So if Europe and Japan are worried, then the negotiators did their career well.

Despite any misgivings the Japanese may have about NAFTA, big Japanese banks have elevated short-term trade loans to Mexico in light from the perceived risk reduction brought about by NAFTA. Some banks have already increased credit exposure to more than $100 million ("Major Japanese Banks" 5).

In terms with the securities market, Telmex was very active in U.S. trading as with the end of November, 1992, on some technical buying and on growing certain sentiment for the outlook for Mexico and the prospects for NAFTA. In accordance with 1 trader, everyone is optimistic as a result of the proposed agreement. He also said that some investors have positioned themselves in anticipation of a rally inside the Mexican marketplace following year on expectations for lower interest rates (Vowinkel BC Cycle).

Mexican industries from Monterrey have crossed the border as well. A few of the bigger industrial companies are putting plants inside U.S., though the small business are seeking U.S. partners. A brand new motorway, nearly completed, will link San Antonio to Monterrey and shorten the old trip a single and one-half hours. According to the governor in the nation of Nuevo Leon, of which Monterrey could be the capital, north-east Mexico and Texas are moving for the true integration.

Nancy Johnson of Du Pont Corp. states that NAFTA don't drag U.S. safety and health standards down. In fact, the treaty will have the opposite effect as U.S.-owned plants pull Mexican safety and health standards up. Du Pont has made it a course of action to follow their U.S. safety and health standards in their foreign plants. ("Unions, Employers, and Government Debate NAFTA" A9). This view is supported by Dick Boggs, vice president of Business Resources Counselors, a membership group of leading U.S. companies which is active in worker safety issues. Boggs states that only little U.S. companies seek to escape U.S. safety and wellness standards by moving to Mexico. Major U.S. corporations observe the exact same safety standards for the world because of the twin desires of corporate liability and public relations.

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