Profs: NAFTA Would Help U.S. Economy

Though the North American Free Trade Agreement (NAFTA) is the topic of heated debate in Washington D.C., many Harvard professors agree its passage would mean a small improvement for the American economy.

"I don't know of anyone who's against it," said Assistant Professor of Economics John V. Leahy. "There's just a general feeling that allowing more opportunity leads to better economics."

The agreement would eliminate tariffs on trade between the U.S., Canada and Mexico.

Though U.S. workers may lose jobs to Mexican workers and experience wage cuts, many Harvard professors agree on NAFTA's overall benefits.

"It's an agreement in our favor," said Robert O. Keohane, Stanfield professor of international peace. "Anyone who's taken any economics and understood it is in favor of NAFTA."

Boas Professor of International Economics Richard N. Cooper said the benefits of free trade between the United States and Mexico would out-weigh NAFTA's detrimental effects.

The agreement would encourage investment in Mexico, in turn increasing its American imports and creating more jobs in the U.S., he said.

"That effect will overwhelm the admittedly negative effects on American workers," Cooper said.

However, NAFTA's economic consequences for the U.S. would be negligible, since Mexican imports are nearly duty-free now, Cooper said. The overall outcome of NAFTA would be "small, but positive," he said.

Government Department Tutor Vikram K. Chand agreed that NAFTA would have a marginal effect on U.S.-Mexico trade.

"I think the NAFTA debate is quite arcane," said Chand, who has lived in Mexico for more than four years and currently serves as the principal con- sultant for the Carter Center's study onMexican elections.

"[NAFTA] just ratifies what already exists: ahigh level of economic integration [between NorthAmerican nations]," he said.

The agreement's greatest effect will bepolitical rather than economic, Chand said. "Byopening Mexico to the U.S., it opens Mexico up tointernational pressure of democratization," hesaid.

Though some environmental groups are protestingthe agreement, NAFTA's impact on the environmentwill be positive, Keohane said.

Since the agreement monitors Mexicanimplementation of environmental rules and includesfines in case the Mexican government violates theguidelines, NAFTA is likely to strengthen Mexicanenvironmental policy, Keohane said.

He said, "I don't think it makes any sense forenvironmental groups to be opposed to NAFTA."

Though professors concur on the agreement'sadvantages, they disagree on the precedent itestablishes for U.S. trade relations with LatinAmerican nations.

Cooper said he is "not keen" on the prospect ofother countries seeking similar agreements withthe U.S. Because the U.S. shares a border withMexico, American interactions with that countryshould differ significantly from U.S. relationswith more distant nations, he said.

"Mexico is in a completely separate category,"Cooper said.

Chand, on the other hand, said NAFTA "is thecornerstone" of the establishment of "aninter-American system based on integrated markets,free trade and democracy." If NAFTA does not pass,Chand said, it will be a "tragic missedopportunity.

"[NAFTA] just ratifies what already exists: ahigh level of economic integration [between NorthAmerican nations]," he said.

The agreement's greatest effect will bepolitical rather than economic, Chand said. "Byopening Mexico to the U.S., it opens Mexico up tointernational pressure of democratization," hesaid.

Though some environmental groups are protestingthe agreement, NAFTA's impact on the environmentwill be positive, Keohane said.

Since the agreement monitors Mexicanimplementation of environmental rules and includesfines in case the Mexican government violates theguidelines, NAFTA is likely to strengthen Mexicanenvironmental policy, Keohane said.

He said, "I don't think it makes any sense forenvironmental groups to be opposed to NAFTA."

Though professors concur on the agreement'sadvantages, they disagree on the precedent itestablishes for U.S. trade relations with LatinAmerican nations.

Cooper said he is "not keen" on the prospect ofother countries seeking similar agreements withthe U.S. Because the U.S. shares a border withMexico, American interactions with that countryshould differ significantly from U.S. relationswith more distant nations, he said.

"Mexico is in a completely separate category,"Cooper said.

Chand, on the other hand, said NAFTA "is thecornerstone" of the establishment of "aninter-American system based on integrated markets,free trade and democracy." If NAFTA does not pass,Chand said, it will be a "tragic missedopportunity.