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283 Top Economists Back Trade Pact, Letter Shows

September 04, 1993|DAVID LAUTER | TIMES STAFF WRITER

WASHINGTON — Escalating their efforts to rebut criticism of the proposed North American Free Trade Agreement with Mexico and Canada, the Clinton Administration released a letter Friday in which 283 leading economists agree that the pact "will be a net positive for the United States, both in terms of employment creation and overall economic growth."

The economists range from Nobel Prize winners Milton Friedman on the right and James Tobin on the left and include 10 other Nobel laureates and many of the most prominent figures in the economics profession.

"While we may not agree on the precise employment impact of NAFTA," the economists wrote, "the assertions that NAFTA will spur an exodus of U.S. jobs to Mexico are without basis."

The letter is part of a concerted White House campaign to rebut the criticisms of the trade agreement made by Texas billionaire Ross Perot, who has begun spending large amounts of his considerable fortune to promote his view that NAFTA will destroy American jobs.

At the same time, Clinton announced, as expected, that former Republican Rep. Bill Frenzel of Minnesota, now at the Brookings Institution, will join his team to help round up support for the trade agreement. Given the large number of Democrats who oppose the pact, Clinton is dependent on Republican votes to gain victory for it.

As the senior Republican member of the House Ways and Means Committee in the last Congress, Frenzel developed a reputation as one of the chief congressional advocates of free trade and as a leading moderate voice in his party.

Frenzel's appointment shows that "we are serious about getting as many votes from members of both parties as we can in the United States Congress," Clinton said as he introduced Frenzel to reporters in the Oval Office.

"This is a jobs issue," Clinton added, sounding the major note that he plans to emphasize in his pro-NAFTA campaign.

"Since the late 1980s, over half of our net new jobs have come from expanding exports," Clinton said. "One of the biggest deterrents to our expanding the job base in America today is declines in exports because of the flat economy in Europe, the flat economy in Japan. Latin America, as a whole, is the second fastest-growing area of the world. Mexico is leading that growth. I believe this is a very good move for the United States. It means more jobs."

Clinton plans to present NAFTA formally to Congress the week of Sept. 13. From that point, under rules governing congressional consideration of trade agreements, Congress will have 90 days to vote the agreement up or down. Because the pact is an agreement, rather than a formal treaty, it requires a majority vote in both houses of Congress, rather than a two-thirds vote of the Senate.

After introducing the pact, Clinton will make a series of speeches promoting it, but his time will be divided between NAFTA and his health care reform proposals, a division that has spurred considerable tension within the Administration.

In addition to Friedman, who is on the staff of the Hoover Institution in Palo Alto, the California-based economists endorsing the trade pact were Kenneth J. Arrow, Donald Brown, Anne O. Krueger, Philip I. Levy, Thomas MacCurdy, Ronald McKinnon, George Pencavel, Peter C. Reiss, G. Saloner, William F. Sharpe, John B. Shoven, Ken Singleton, John B. Taylor and Frank Wolak of Stanford University;

Patrick R. Asea, Arnold C. Harberger, Federico Sturzenegger of UCLA; Menzie Chinn of UC Santa Cruz; Roger Craine, Gerard Debreu, Barry Eichengreen, Joseph Farrell, Albert Fishlow, Jeffrey A. Frankel, Jack Lettichi, Richard Lyons, Maurice Obstfeld, Matthew Rabin, Christina Romber, David Romer, Andrew Rose, Paul A. Ruud, Ernesto Stein, Kenneth Train and Janet Yellen of UC Berkeley; Robert Engle, Bruce Lehmann and Michael Rothschild of UC San Diego; R. Feenstra of UC Davis; B. Peter Rosendorff of USC; and Doug Steigerwald and Linda L. Tesar of UC Santa Barbara.

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