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Bush Fears Free Trade Pact Issue in Election

Kevin J Kelley writes from Washington
***After its trade agreement with Canada, the US is now negotiating a free-trade pact with Mexico. It would create a common market of 360 million people with worldwide implications. Some US groups including the Democratic Party, oppose the pact, fearing many US jobs will be lost to low-wage Mexican labour. Gemini News Service reports on a deal with domestic implications in US election year.
MEXICO and the United Stale* are negotiating a free-trade »grrtm
Implication*
If they overcome the many obstacle* in the way. all North America will eventually be joined in a commercial union similar to the European Com munity Canada and the US signed a bilateral free-trade pact in 1989. It ia due to take lull effect by the end of thte decade
The addition of Mexico would create a common mar ket of 360 million people, st retching from the Yukon to the Yucatan, with a combined annual economic output to tailing about • 6 trillion
That fact alone makes the US-Mexican trade talks of great significance to the rest of the world But the remlfica tions of a full Hedged North American Free Trade Agree ment would be felt moat directly In Asia and Latin Amer-
Economic officials and business leaders In Japan and other major Asian exporting nations are Increasingly worried by the prospect of a US-Mexlco trade deal They fear that the agreement to phase out tariffs on goods and services crossing the Rio Grande will give Mexico much greater access to the US market - at Asia's expense.
; Mexican exporters would no longer be affected by US protectionist barriers that apply to certain Aslan-made products.
In addition, nervous observers tn countries like South Korea and Malaysia suspect that looser financial restraints between the North American neighbours will give Mexico a big advantage over Asia In the
competition for US investment capital
Latin America generally hopes the treaty will be signed soon A free-trade pact between the US and a developing Latin nation Is seen as an
similar agreement encompassing much of the Western Hemisphere. President George Bush called for Just such an ar rangement in 1990 when he loosely outlined an 'Enterprise for the Americas Initiative
IfoUtltians throughout Cen tral and South America responded enthusiastically. As they go about implementing economic reforms tn many of their own countries. Latin leaders are keeping their eyes on what moat consider the ui-tlmate prize : duty-free access to the North American market Three regional free-trade blocs are already taking shape among the Andean. Southern cone and Central American nations.
But the Mexico-US agreement is by no means a sure thing. Some powerful interest groups tn the US are determined to defeat any free-trade pact with Mexico brought before the US Congress for ratification.
These opponents of Bush’s effort to forge an agreement with Mexican President Carlos Salinas de Gortarl fought last spring to undermine the changes of a settlement. The White House ultimately prevailed in this battle over whether congressional foes of the treaty could attach potentially fatal amendments to it.
The Democratic Party opposes a US-Mexico free-trade agreement. Its stance mainly reflects the political Influence of the trade Union movement, which fears many jobs will be lost tn the US as manufacturer* are lured south of the bor-k»K»Mby '° *' Mex,c“n US environmental groups are also trying to block the deal They argue that pollution problems In the 1.550-mile US-Mexico border region will worsen considerably If agree ment Is reached Mexico has much more lenient environ mental laws and far less anti pollution technology than the US. these lobbyists note, pointing to the water and atmospheric contamination already being caused In California and Texas by factories a few miles Inside Mexico.
Many of these assembly Cints. known a* maquiladora*.
ve been built by US compa nles Hundreds more, with equally poor pollution controls will be constructed once free trade goes into effect, the environmentalists warn.
Consumer advocates have joined the campaign to defeat the agreement They say food Imports from Mexico are likely to contain dangerous additive* and pesticide residues
And labour leaders join with these other opponent* In pre dieting that a treaty with Mex too will enable some US bust nesae* to blackmail state and local governments According to this scenario, companies will threaten to relocate to Mexico unless tiiey are given exemption* from US job-safety and environmental regulations
Some political forces in Mexico are also trying to stop free trade. Left-wing opponents of the Salinas government maintain that Mexico has Hl tie to gain from such an agreement, since It already sends 70 per cent of its exports to the US. Few job* will be created for Mexican workers as a result of free trade, say these groups.
But Selina* appear* to have broad support within his country for lowering tariff barriers between Mexico and the US. A recent Los Angeles Times poll found 81 per cent of surveyed Mexicans favour free trade with the US. while only 15 per cent are against ft. That ap proval was expressed despite fear* on the part of half the poll respondents that a treaty would lead to greater US domination.
Within the US. many farm, banking and export-oriented business ardently favour a pact with Mexico. The 88 million Mexicans are seen as compri* Ing a potentially lucrative mar ket for US finished goods, food grains and high-technology Mexico s abundant oil and ga* supplie* also act as a major incentive for successful talks.
At the same time, however, several US maker* are Insisting that any treaty must con tain safeguard* against Mexico becoming a "trampoline' from which Aslan exports can be catapulted across the border
US car makers. In partlcuter. want $ provision fa] the •freemeiU requiring, that built Jtet*r£ from parts of North American origin The fear fa that Japanese and Ko
cumvent US tariffs by shipping to Mexico for <~»My and eventual export to the US.
One most powerful claim made by US free trade kdvo^ cate* is that an agreement with Mexico will discourage illegal emigration across the Rio Grande because a trade treaty will touch off an economic boom In the border.
Third World immigration, particularly from Mexico, has emerged a* a potent political issue in this year's US election campaign.
Perhaps the biggest overall obstacle to a free-trade ^ree ment Is the fact that the US and Mexican economies are at a vastly different stages of development.
The average Mexican worker earn* roughly 10 per cent of what a typical US worker is paid. And despite Mexico* geographical status as a pari ofNorth America, most people in the US feel they have little in common culturally with their neighbour* to the south.
For many reasons, then, ft now appears that a free-trade agreement will not be reached In the next few months. And that could become a problem In Itself, since Bush and other Republican treaty proponents would prefer that the Democrat* could not use a pending pact a* an election is sue.
(Kevin J KMey is o American Journalist and editor of Toward* Freedom journal).