document: just try explaining what GATT , the Uruguay Round or Blair House are all about - but US investors have adopted a sensibly direct approach to the North American Free Trade Agreement : if Congress passes the treaty next week , it will be good for the economy , good for US companies , good for the stock markets , and good for President Clinton . Their reasoning is quite simple . Investors believe that Nafta will lift corporate profits because in a more open trading environment between the three signatory countries the US , with its superior industrial productivity rates and better-quality products , will enjoy the greatest economic benefits . The expectation is that growth in US exports to Mexico and Canada will outpace growth in imports from its neighbours to the north and south . Investors are not alone in their optimistic view of Nafta . Most Wall Street economists are pro-Nafta , as are the majority of business leaders , if recent polls are to be believed . There is , however , the dark side of Nafta to consider . What if Congress votes no ? Investors fear that a rejection of Nafta would have dangerous knock - on effects around the world , depressing share prices in the US , Latin America and eventually Europe , and endangering vital trade negotiations over the Uruguay Round . By coincidence , the day after next week 's Nafta vote , Clinton will be in Seattle for a trade conference with leaders of Asian Pacific Nations . If he arrives there fresh from defeat on Nafta , the President 's authority on trade issues will be compromised . Investors ' darkest fear is that a no vote on Nafta would throw such a spanner in the works of world trade that it would lead to a new era of international protectionism , higher inflation and slower world economic growth . In this scenario , inflation would be the biggest concern of markets . Many economists argue that the competitive forces unleashed by the accelerating collapse of international trade barriers have helped restrain global inflation . Low worldwide inflation has kept bond yields at historic lows , which in turn have boosted share prices to record highs in many markets . Thus , any reversal in that trend - a return of trade barriers , higher inflation , higher bond yields , - could undermine equity markets that are already vulnerable to a sharp downward correction because of expensive stock valuations . Then there is the political cost of Nafta 's failure to consider . Although the President inherited the trade pact from his Republican predecessor , he has invested a lot of his own political capital in getting Nafta through Congress . On paper , this should not be a particularly difficult task , because Congress is controlled by Democrats . Yet , opposition to Nafta among Democratic legislators beholden to labour interests is considerable . Anti-Nafta forces have warned that opening up trade with Mexico will lead to a migration of American jobs south of the border , where wages are much lower . Because the domestic labour market remains weak , this line has struck a strong chord with ordinary Americans . The result is that the President faces a tough fight ensuring that the House of Representatives votes to approve the treaty on Wednesday . As of yesterday , the outcome of the vote was deemed too close to call . Stock markets in Mexico and the US , however , believe the chances of success for Nafta improved this week . Share prices in Mexico rose on Wednesday and Thursday , and US stocks made solid gains , following the televised debate on Tuesday between Vice-President Al Gore and Ross Perot , who is Nafta 's most celebrated opponent . Gore clearly bested Perot in a heated war of words , and polls taken over the next few days revealed that more Americans had been won over to Nafta . Whether this helped swing the votes of some anti-Nafta legislators the Clinton administration 's way remains to be seem . Nafta is playing on investors ' minds because doubts over its passage through Congress have arisen at a vulnerable time for stock and bond prices . A week ago bond yields jumped amid worries that resurgent economic growth might rekindle inflation . Although data released this week on producer and consumer prices showed that fears of rising inflation are , at least for now , unjustified , equity investors remain nervous about rising bond yields . Amid all the doubts over the Nafta , one thing is certain , trading on markets next week is likely to be hamstrung by uncertainty over Wednesday night 's vote , which , like the battle over President Clinton 's first budget , will be extremely close . ----------------------------------------------- Monday 3647.90 + 04.47 Tuesday 3640.07 - 07.83 Wednesday 3663.55 + 23.48 Thursday 3662.43 - 01.12 Friday 3684.51 + 22.08 -----------------------------------------------
extractive_keyphrases: north american free trade agreement president clinton economic benefits open trading environment trade pact global inflation international protectionism investors
abstractive_keyphrases: anti-nafta forces