Mexico and the U.S. get cozy
Just three months after U.S. and Mexican government officials began negotiations toward a trilateral North American Free Trade Agreement (NAFTA) along with Canada, the question in the minds of local business and government leaders is: Can Puerto Rico compete effectively with Mexico under a fullfledged NAFTA?
Puerto Rico has experienced sustained economic growth over the past 40 years, largely because of the free entry of its products into the U.S. mainland. Now, Puerto Rico stands to share this privilege with Mexico.
NAFTA is part of the broader Enterprise for the Americas Initiative (EAI) proposed by President George Bush calling for a hemispheric free-trade bloc. It would eliminate quotas, tariffs and non-tariff barriers to trade and investment among these three countries to create a huge common market of 362 million inhabitants with Canada in the north and Mexico in the south. This market would have a combined annual production of $5.9 trillion and exports of around $225 billion.
"Undoubtedly this trade agreement is opening the biggest market in the world to us," Jesus Cevallos Gomez, president of the Confederacion de Camaras Industriales de los Estados Unidos Mexicanos, a confederation of Mexican industry groups based in Mexico City, told CARIBBEAN BUSINESS during a recent visit to Puerto Rico. "In terms of dollars, it is a bigger market than the European Economic Community."
The possibility of a U.S./Mexico free-trade agreement (FTA) should be cause for genuine concern to Puerto Rico businesspeople and industrial development strategists. Mexico, after …