While the proposed North American Free Trade Agreement might result in the loss of some labor-intensive businesses to Mexico, the mass exodus of all such industries from the United States is not a foregone conclusion, according to a UC Davis agricultural economist. "If it proves to be a successful agreement and lowers tariffs, some labor-intensive businesses in areas such as clothing and appliance manufacturing might move across the border to take advantage of cheaper labor prices," says Colin Carter, a professor of agricultural economics. "However, one of the lessons we've learned from the Canadian/U.S. Free Trade Agreement is that manufacturing and processing costs, while certainly important, may not be the overriding issues." At the time the Canadian agreement was signed in 1989, it was feared that Canada would lose its wine industry and horticultural production and processing industries to the United States, Carter recalls. Three years later, these industries continue to survive in Canada, he says. Carter, who was born and educated in Canada, is an authority on international trade. He was part of a team of experts that recently drafted a report on the impacts of the Canadian/U.S. Free Trade Agreement.