to buy American products."
For the last decade, Mr. Ma-
mat has been helping company
leaders with the legal maneu-
vers necessary for moving busi-
ness outside of Michigan if they
decide it's an inhospitable cli-
mate. He said he has no indi-
cation from clients that NAFTA
will result in a grand exodus
south.
He sees the plans of retrain-
ing displaced workers and gear-
ing up for a changing economy
as a more important part of
NAFTA.
"We need to focus on some
sort of apprenticeship training
program," Mr. Mamat said.
"There's a lack of new jobs and
of decent paying jobs. The days
of people not finishing high
school and thinking they can go
into a $25 or $30 an hour job at
one of the Big Three and hav-
ing a nice life for the next 35
years are gone and never corn-
ing back. And NAFTA's not go-
ing to change that equation
either way."
Bruce A. Miller, an attorney
who has represented labor
unions for more than 30 years,
views NAFTA as more than a
symbol.
He believes the trade pact
will accelerate the process of
companies moving operations
south.
He says the labor side agree-
ment is not strong enough be-
cause there aren't sufficient
enforcement mechanisms.
"The labor community is not
split," he said. "To my knowl-
edge there's virtual hostility to
it."
Mr. Miller, who lived in Mex-
ico for two years, said the coun-
try has one of the finest systems
of labor law in the world, but
added it is totally unenforced
because bribery runs rampant.
"It's irreversible because it's

a sovereign country and the
side agreements made are very
weak," he said. "I have no ob-
jection to a common market be-
tween countries of relative
equality, like the United States
and Canada which have fairly
similar standards of living.
But I do object to having a
common market between coun-
tries which are so divergent.

"The days of people
not finishing high
school and thinking
they can go into
a $25 or $30 an
hour job at one of
the Big Three are
gone and never
coming back."

"The fact of the matter is it is
already too easy for American
capital to relocate," Mr. Miller
said. "And what this does is
make it even easier by elimi-
nating whatever restrictions,
no matter how weak they are,
that are still in existence."
Mr. Miller objects to the re-
moval of tariffs, which he says
help level out the playing field
between the two countries.
Joel Tauber, president of
Tauber Enterprises, which
manufactures auto parts over-
seas, says some of his part sup-
ply operations will follow the
lead of the Big Three in relo-
cating in Mexico.
"People don't realize, the low-
er the cost of a car, the more
cars you can sell, which there-
fore increases business," he
said. "Hit will enhance the auto
business, and make it more

profitable and sell more cars,
then that's good for everybody."
Mr. Tauber said he is being
required by auto companies to
move some manufacturing ac-
tivity to Mexico — closer to.as-
sembly plants — to supply
parts more quickly. He won't
experience a huge savings in la-
bor costs because the produc-
tivity may not be as great as in
the United States, he said.
"I think the more free trade
we have around the world, the
better it is for all countries," Mr.
Tauber said. "We've learned in
the last 20 or 30 years that
broader markets are better for
everyone. It's just economic his-
tory. But there are people with
narrow points of view who just
don't believe it."
It's not just auto-related busi-
nesses affected by the trade
agreement. While the "Buy
American" and "Made in the
USA" promotions have gained
momentum, many Mexican
products are still being de-
manded by northern con-
sumers.
Jack Kane, a Ferndale inte-
rior designer, deals with dis-
tributors who carry many
foreign product lines.
While he hopes NAFTA ulti-
mately benefits the U.S. econ-
omy, Mr. Kane sees potential
personal payoffs. It will most
likely have a direct effect on his
ability to obtain products more
timely, he says.
"I just delivered one whole
line for a client in West Bloom-
field, and every piece was made
in Mexico," Mr. Kane said. "It
took eight months for delivery,
instead of the three months
promised. I think the agree-
ment could open up an avenue
of respectful manufacturing
and shipping between what is
to me one of the most unused
sources of wealth."

Why All The Fuss Over NAFTA?

KIMBERLY UFTON STAFF WRITER

Robert Reich

T

he concept of free trade is
not new. America has
played the international
trade game since its
founding. And it has prospered.
Few complain over the free

trade arrangement with Israel.
Nor do many complain about
free trade between Israel and
the European Common Mar-
ket. This makes importing and
exporting easier for everyone
who sets up shop in Israel.
So then why all the confusion
over this North American Free
Trade Agreement plan to lift
trade tariffs between the U.S.,
Mexico and Canada?
According to a recent Time
magazine poll, no one really un-
derstands NAFTA. Perhaps
this is because arguments for
and against the agreement are
equally compelling and because
NAFTA cuts across historical
political party lines.
Simply stated, NAFTA — if
approved by Congress — would
allow free trade between na-
tions already doing business
with each other. Unfortunate-
ly, it is not so simple.

NAFTA makes the area from
the Yucatan to the Yukon one
big trade zone, creating the
largest trading bloc in the
world.
Supporters — including
President Clinton, the Repub-
lican Party, former Chrysler
Chairman Lee Iacocca and both
major dailies in metropolitan
Detroit — say NAFTA will cre-
ate a boon for American work-
ers by expanding the U.S.
market.
They say an agreement like
NAFTA is necessary for the
United States to compete in the
"new global economy."
As Labor Secretary Robert
Reich explains, "NAFTA doesn't
so much open the U.S. market
to Mexican goods as it opens the
Mexican market to American
goods."
Opponents — like Michigan's
NAFTA page 39

ISRAEL. DIGEST

Specially compiled by The Jerusalem Post

—$1 EQUALS 28750 NIS (shekels) - Close price 1001/93 —

Currency Limits Canceled

Israel has promised the In-
ternational Monetary Fund
that it will impose no limits on
foreign currency import and
export transactions and that
it will follow a uniform ex-
change rate policy, the Bank
of Israel announced.
Finance Minister Avraham
Shohat and Bank of Israel
Governor Jacob Frenkel made

the joint announcement in a
letter to the IMF last week.
The move was made possi-
ble by the July decision to
eliminate the exchange rate
insurance to exporters and the
import levy. It was also made
possible by the cancellation of
the travel tax and the ongoing
foreign currency Itheralization
program.

Club Inn Hotel Sold

The Ladbroke Group, based in
the United Kingdom and
headed by Anglo-Jewish busi-
nessman Cyril Stein, has sold
the Club Inn Hotel in Elicit for
$14 million. The hotel was sold
to the Akirov family, headed
by businessman Alfred
Akirov, and the Ella brothers
from Jerusalem.
A source close to the hotel
business said the Ladbroke
Group spent the last few
months in search of potential

investors to purchase the ho-
tel. The source said most of the
local hotel chains were not in-
terested in purchasing the ho-
tel under the conditions
offered by Mr. Stein.
The Club Inn, which was
recently renovated, includes
130 independent units of two
or three rooms. The hotel, sit-
uated on 10 acres close to
Coral Beach, was managed by
the Hilton chain.

Intel Plans For Plant

Intel Electronics Ltd., the lo-
cal subsidiary of the Califor-
nia-based Intel Corporation,
has announced plans to build
an additional plant in
Jerusalem, with an invest-
ment of between $700 million
and $1.5 billion.
Intel president Dov
Frohman made the an-
nouncement at a meeting with
Finance Minister Avraham
Shohat, and told him the com-

pany would submit its plans
soon to the Government In-
vestment Center for approval.
In the meantime, Mr.
Frohman said, initial planning
for the enterprise is to begin,
immediately, with construc-
tion due to start at the end of
1994. The company's design
center in Haifa is also expect-
ed to double in size in the near
future.

Firms Agree On Merger

Israel's ECI Telecom an-
nounced it has reached an
agreement in principle to
merge with the U.S. telephone
networking company Telem-
atics International.
The Petah Tikva-based ECI
will allot new shares to all
shareholders of Telematics,
who will receive a third of an
ordinary share in ECI for each
share of common stock in
Telematics.

Both companies are trad-
ed in New York on NASDAQ•
lithe deal receives approval
from all the necessary regula-
tory bodies and the respective
directors, Telematics' share-
holders will hold approxi-
mately 15.7 percent of ECI's
equity and Telematics will
have two representatives on
ECI's board of directors. The
deal is expected to be com-
pleted in early October.

Growth Is Predicted

Major economic indicators
during the past two months
were mixed.
According to Central Bu-
reau of Statistics figures, there
was an increase in private con-
sumption and industrial pro-
duction, while exports and
income from tourism dropped
after sharp increases at the be-
ginning of the year.
Similarly, imports of in-
dustrial raw materials, ma-
chinery, and other equipment,
which tend to be precursors of

increased industrial activity,
dropped.
Despite a drop of 12 per-
cent in industrial investment
in machinery, equipment, and
vehicles over the past two
months, Bar-Shavit sees a bal-
anced and moderately grow-
ing economy. His optimism is
based on the strong industri-
al production figures and the
1 percent drop in unemploy-
ment during the second quar-
ter of the year.

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37