WATCHING WASHINGTON DOUBTS RAISED ABOUT NAFTA

With Patrick Crow The proposed North American Free Trade Agreement (Nafta), which would strip away trade barriers among Canada, the U.S., and Mexico, appears to be much less a sure thing these days. The Clinton administration insists Nafta must be supplemented with an agreement to protect American labor and ensure environmental protection. Talks on that pact will begin Apr. 2, and U.S. Trade Representative Mickey Kantor has told Congress it must have "real teeth" or the administration won't

March 29, 1993

3 min read

The proposed North American Free Trade Agreement (Nafta), which would strip away trade barriers among Canada, the U.S., and Mexico, appears to be much less a sure thing these days.

The Clinton administration insists Nafta must be supplemented with an agreement to protect American labor and ensure environmental protection.

Talks on that pact will begin Apr. 2, and U.S. Trade Representative Mickey Kantor has told Congress it must have "real teeth" or the administration won't seek congressional approval for Nafta.

Kantor said the U.S. wants a guarantee that major environmental or worker safety violations would be automatic grounds to set trade sanctions in motion.

CLINTON'S STANCE

At a press conference last week, President Clinton soft-pedaled that rigid stance. But he didn't reverse it.

Clinton said, "I wouldn't call it being tough. I would say that I intend to try to get a trade agreement that will be in the best interests of the U.S. and Mexico.

"And keep in mind this is not simply a trade agreement. This also is an investment agreement. And the issue is whether, when we make it much more attractive for the U.S. to invest in Mexico and much more secure, shouldn't we also, in the interest of the economies of Mexico and the U.S., see that basic environmental standards and labor standards are observed?

"And shouldn't we have some protections greater than those embodied in the present agreement in the event there are severe economic dislocations because of unintended consequences? I believe we should, and I believe that's in Mexico's interest."

Clinton added, "The investment provisions need to be used in ways that will raise wages on both sides of the border instead of lower wages on both sides of the border and pollute the environment. That's what I want to avoid."

The president has an excellent bargaining position. Turnover in the House of Representatives has made Nafta passage a chancy proposition, and his enthusiastic support is essential.

A TURNABOUT

So the tables have turned on the Mexican government.

Last year, the Bush administration was desperate to sign a treaty before the November elections and conceded many issues to Mexican negotiators.

The U.S. oil industry was particularly disappointed that Nafta afforded it little business opportunity in Mexico.

But now the Mexican government is scrambling to save the treaty. It has reassured the U.S. about its commitment to environmental protection and recently raided large Mexican firms that allegedly were using pirated American computer software.