If you believe what you read, Mexican autoworkers are putting in overtime while workers in Michigan are losing their jobs. Ralph Nader’s Public Citizen lobby, which fought tooth and nail against the North American Free Trade Agreement two years ago, issued a blistering report on Labor Day condemning the pact. Jimmy Hoffa Jr. is betting that attacks on NAFTA will carry him to the presidency of the Teamsters union. Patrick Buchanan, a Republican aspirant in a different presidential race, wrote in The New York Times that “NAFTA should be canceled.” But the Second Battle of NAFTA, like the First, is long on hyperbole and short on facts. NAFTA is neither salvation nor economic disaster–and the changes it is causing are proving far more painful for Mexico than for the United States.

The new assault on NAFTA rests on a single premise: exports are good, imports are bad. Economically, that’s nonsensical; the whole purpose of selling abroad is to be able to buy things that make you better off–including imports. As a political proposition, though, the claim that exports create jobs while imports kill them is an easy sell. That’s why the critics fell silent during NAFTA’s first year, 1994, as U.S. plants ran overtime to meet Mexico’s clamor for Coors beer and Chevy Suburbans. That clamor stopped after December’s peso crash. Devastated Mexican consumers aren’t buying, turning last year’s U.S. trade surplus with Mexico into an $8 billion deficit in the first half of 1995. NAFTA foes adroitly seized the opening. “NAFTA is causing the loss of existing jobs, while the new jobs that were promised aren’t being created,” Public Citizen charged.

There’s no question that exports to Mexico have fallen off a cliff, and some U.S. companies have moved work south. The Labor Department says that since the start of 1994, 38,148 workers at 286 firms have lost their jobs due to NAFTA. But NAFTA’s critics don’t mention that the U.S. economy has added more than 3 million jobs over that same period–a hundred times the number the trade pact supposedly killed. How many are due directly to NAFTA? Who knows? More to the point, who cares? Trade helps keep the economy chugging, and in a healthy economy employers are willing to hire. The trade deficit with Mexico, about one tenth of 1 percent of the $7 trillion U.S. economy, just isn’t much of a factor.

So why is NAFTA heating up now? Presidential politics is only part of the story. The rest lies behind the scenes on Capitol Hill. Last week Hill aides were pronouncing the death, at least for this year, of the Clinton administration’s plan to bring Chile into NAFTA–a plan Public Citizen opposes. At the same time, organized labor and its allies are battling a Republican bid to scrap retraining programs for workers displaced by trade. Publicity over NAFTA-related job losses bolsters their case on both issues. Last week they won a small victory: to pass welfare reform, Senate Republicans agreed to leave out proposals to slash retraining.

The backwash from Washington’s NAFTA tempest is making Mexico’s problems worse. The government of President Ernesto Zedillo claims that the economic collapse is over; privately, however, businessmen say the chaos may last until next summer. NAFTA is taking some of the blame. In Monterrey, where dozens of U.S. companies have plants, more than 50,000 workers have lost their jobs this year. In Hermosillo, Ford’s showcase plant laid off workers due to slack U.S. demand for cars. In Mexico City, government officials’ outrage can’t hide their embarrassment after the first joint panel established under NAFTA’s procedures overturned a Mexican ruling against imports of U.S. steel. The export boom is tailing off because outmoded factories can’t afford new machinery. “It’s a whole new world for Mexico,” says a Monterrey economist worried about the corroded industrial base. “People haven’t recognized that yet.” Pat Buchanan may think that “a new Detroit is rising” south of the Rio Grande, but the World Economic Foram, a Swiss-based business group, has a very different impression. A year ago, the Forum praised Mexico as a great place to put a factory. Its new revisions rank Mexico only a tad more attractive than Russia.