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0 THE RURAL VOICE
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ADIOS AMIGOS!
Gord Wainman has been an urban -
based agriculture reporter for 13 years.
"No comprendo" in Mexico means
"I don't understand."
"No comprendo" was the expres-
sion I used most in Mexico three years
ago, and comes to mind as Mexico
this summer makes financial news
around the world.
"Pressure mounting for free trade
pact to include Mexico," read the
front-page Toronto Star headline on
June 25.
A so-called "new plan" to create a
North American common market to
include Mexico — and I emphasize
the world "new" — is being touted by
U.S. politicians and by business on
both sides of the Canada/U.S. border,
the report stated.
New plan? ... No comprendo!
A year ago July, I told readers of
this column about the 1984 interview
I did with soon-to-be U.S. trade
ambassador Clayton Yeutter.
The architect of the 1988 Canada/
U.S. trade pact said then that Ronald
Reagan intended to pursue a North
American common market with Mex-
ico and Canada, an idea he first con-
ceived in the 1980 election campaign.
Then again, in January of this year,
I told Rural Voice readers of Reagan's
successor George Bush talking com-
mon market with Mexican president
Carlos Salinas de Gortarim.
New plan? ... No comprendo!
For several years now, American
and Canadian companies — more
recently Fleck Manufacturing of
Centralia — have fled to the cheap -
wage haven and free -trade zone of
northern Mexico.
So why arc people surprised that
buccaneer Canadian bank, business,
and political interests are pushing for
a Mexico/U.S./Canada common mar-
ket? . .. No comprendo!
Mexico was in the news again at
the end of July.
This time the U.S. treasury depart-
ment had convened a major debt crisis
meeting of 15 Western bankers —
two from the Bank of Montreal, which
holds the bag on $1.7 billion of
Mexico's $107.4 billion foreign debt.
Agreement was reached to write
down that debt by 35 per cent and
at the same time to offer insolvent
Mexico new, easy term loans.
I'm not saying Mexico shouldn't
get the write-down. Its impoverished
population can't take any more hurt.
Anyway, Mexicans might revolt.
They have a history of it.
Another reason for the write-down,
of course, is that Mexico could de-
fault. Observers say a default on $107
billion in debt could cause a domino
effect on world banks.
Why, many Canadian farmers will
ask, don't Canadian banks offer them
the same 35 per cent write-down of
debt along with new, easy term loans?
After all, many Canadian farmers are
insolvent just like Mexico.
The answer is simple. If Canadian
farmers default, they won't bring the
world banking system down with
them. If Mexico docs, it will.
Six Canadian banks hold $5.03
billion of Mexico's $107.4 billion
foreign debt. That's 4.7 per cent of
the total. But the Canadian banks
represent only 1.2 per cent of the 500
banks owed money by Mexico.
With that out -of -proportion expo-
sure, Canadian banks will encourage
anything to ensure Mexico pays back
its remaining debt and new loans.
If this means more Canadian
industry should move to Mexico and
that Canadian import barriers to cheap
Mexican food should be dropped, then
that's what will happen.
As President Carlos Salinas de
Gortarim said when the 35 per cent
write-down was announced: "This is
a great moment for Mcxicans."
And I would say to a number of
endangered Canadian farmers and
factory workers: "Adios, amigos!"0