Bill Clinton: “Well, first of all, let me make this statement at the outset. One of the things that our administration has never denied…”

“Well, first of all, let me make this statement at the outset. One of the things that our administration has never denied is the fears of middle class Americans about the loss of their jobs or the loss of their incomes. About 60 percent of our work force has suffered from stagnant wages or worse for almost two decades. So my answer to them is not that their fears are unfounded--they have legitimate fears and experience to base that on--but that this agreement will improve their conditions, not make it worse. And let me explain why. I think this is at the nub of at least the negative side of the argument. First, let me say by way of background that I was the Governor of a State for 12 years that had plants close and move to Mexico. And I worked very, very hard to try to restructure my State's economy, to maintain a manufacturing base, and to rebuild from the hard, hard years we had in the early eighties. And my State did not have an unemployment rate below the national average in any year I was Governor until last year, when we ranked first or second in the country in job growth. But it was a long, painful process of rebuilding. I know a lot about this. We lost jobs to Mexico. Now, the point I want to make about this is, number one, Mexico had a very small role in the decline of manufacturing jobs in America in the last 15 years. They declined because of foreign competition from rich countries as well as poor countries. If you look at just the manufacturing trade advantage, you will find that obviously the biggest trade deficit we have is with Japan, a rich country. Number two, a lot of this happened in every advanced country because of productivity increases that came because of mechanization. Just the improvements in technology meant that we could produce more things with fewer people. That's what rise in productivity means. So manufacturing has been going through something of the same thing that agriculture went through. When I was born, in my home State, an enormous percentage of our people worked on the farm. Now it's down to probably 4 percent, even though Arkansas is a big farm State. So a lot of these things are big long-term developments. Number three, the device which made Mexico particularly attractive for plant was the so-called maquilladora system, which basically identifies an area along the Mexican-American border in which plants can locate and produce for the American market and send it back in here without paying tariffs, taking advantage of the low wages in Mexico and the other lower costs of production. Now, if you look at that and you look at what NAFTA does, it's easy to see how NAFTA will make it less likely, not impossible--I'm not saying none of this will ever happen--but it will be less likely than it is now that we'll have significant movement of manufacturing facilities to Mexico for low wages. Why is that? For one thing, NAFTA will give bigger markets to American manufacturers here at home by lowering the tariff barriers and by doing something else which is quite important: It reduces the domestic content requirements that Mexico imposes on American manufacturers, which means that--domestic content basically says you've got to make this stuff here if you want to sell it here. So that the auto industry, for example, estimates that they'll go from selling 1,000 to 50,000, 60,000 cars, made in America, in Mexico in one year. So we'll have more access to the market. Secondly, what Mexico gets out of this is not more plants to produce for the American market. If NAFTA passes, under the terms of the side agreement our administration negotiated, there is no question that environmental costs will go up in Mexico because of the environmental side agreement. There is no question that labor costs will go up more rapidly in Mexico because Mexico is the first country ever to put its labor code, which it admits has regularly been violated, and now they put their labor code into this trade agreement. So that if they violate their labor code, we can bring a trade action against them. And furthermore, President Salinas has said that he will raise the minimum wage on an annual basis as the economy of the country grows. So if NAFTA passes, wage rates will go up more rapidly, costs of production from environmental protection will go up more rapidly, trade barriers to American products will go down more, the requirements to produce in Mexico if you want to sell in Mexico will go down more. Therefore, the conditions which people are worried about, which are legitimate conditions, will be improved if NAFTA passes, not aggravated. Now, that's a long answer, but that's the nub of the negative argument against this. And I think it's important to get it out.”