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Mexico isn't out of the woods yet after its close brush with financial disaster. But it's getting there.

Just look at how far Mexico has come, thanks in no small part to the quick bailout engineered by President Clinton after Congress dragged its feet. The value of the peso is up. So are Mexican stock prices. Inflation is moderating. Though the future still isn't certain, the worst seems to be over. As long as Mexico can avoid political or social turmoil, continued economic progress can be expected.This encouraging track record should be kept firmly in mind by the U.S. Congress because it shows the folly of some lawmakers' efforts to make the Clinton administration's loan package subject to a congressional veto. Such a step would amount to punishing both the White House and Mexico for success.

Congress should also keep these points in mind next month when it starts debating whether Chile should be admitted to the North American Free Trade Agreement.

Some NAFTA opponents in and out of Congress are trying to insist that the trade pact led directly to Mexico's recent financial woes. What nonsense!

Mexico's near-meltdown was caused by overdependence on foreign capital and protracted overvaluation of the peso. When a bungled devaluation caused investors to flee and sent the peso into free-fall, outside financial help was needed to prevent a default.

Far from worsening the crisis, NAFTA softened it. As the Journal of Commerce notes: "Mexico City's commitments under NAFTA made it easier to avoid the usual, knee-jerk reaction of developing countries in crisis: imposing import barriers, restricting capital movements and limiting economic activity. Instead, Mexico adopted an austerity plan that reduces living standards in the short run but avoids the long-term costs of closing off the economy."

Besides, the case for admitting Chile to NAFTA should be considered on its own merits - and it is a strong case. Chile has a strong economy and bears little resemblance to Mexico. After freeing itself of military dictatorship, Chile has controlled inflation, privatized key industries and embraced free-market policies.

Utah has a stake in the outcome of the debate over admitting Chile to NAFTA. That's because Utah mining firms have financial interests in Chile. Likewise, Utah computer firms have found a welcome market in Chile for their software products.

The course for Congress should be clear: Admit Chile into NAFTA and avoid the temptation to tinker with a loan package that is helping Mexico become a more stable and reliable neighbor.