Clinton Faces Hurdles on NAFTA

Maybe Ross Perot didn’t derail the “fast-tracked” North American Free Trade Agreement, but it was hit a telling blow when he succinctly warned there would be a “giant sucking sound of jobs being pulled out of this country” into Mexico if NAFTA is not killed by Congress.

Perot’s catchy, widely quoted phrase used during the presidential debates neatly summarized the problem. Many fear that the proposed agreement between the United States, Mexico and Canada will mean the transfer to Mexico of hundreds of thousands of jobs we and the Canadians badly need.

However, a few clever lines won’t kill the agreement that President Clinton says he wants if it can be adequately modified to cut our own job losses and somehow ease the pain those losses will surely cause.

Clinton has some intriguing plans to try to get approval of the treaty by modifying its effect, but they may fail since our continuing high unemployment is increasing opposition.

Going for him are powerful corporate and political forces in the United States, Canada and Mexico that are waging a propaganda war against what they damn as “protectionism.” They want to get congressional approval of the treaty with few changes. As it stands, it amounts to a favor to corporations. The treaty would reduce tariffs, and that sounds fine, but it would also encourage U.S. companies to speed the shift of jobs to Mexico.

Fighting that is an impressive array of opponents to the treaty that was signed Dec. 17 by the heads of the governments of the United States, Mexico and Canada. Its “fast-track” status means Congress can dump it but not simply amend it to make it more palatable.

Clinton could win approval of the treaty by weakening the opposition if he can get side agreements with Mexico and “implementing legislation” from Congress. He and his aides are trying several tactics to do just that.

One is to take advantage of the furious political battles in Mexico. Clinton aides are sure that Mexico’s President Carlos Salinas de Gortari will make significant side-agreement concessions to help the treaty win congressional approval.

Salinas’ term is up next year, and he is said to be almost desperate to have the treaty in effect before then so his conservative party that has won every presidential election for more than 60 years can prevail again.

If NAFTA passes, Salinas figures that it will mean a burst of new jobs from the United States and Canada and a flurry of new economic investment that will boost the Mexican stock market.

That good news for Mexico may help Salinas’ party defeat a key opponent, the progressive Cuauhtemoc Cardenas, who strongly opposes the agreement and claims only a fraudulent election gave Salinas a victory in the last election.

So Clinton is expected to push Salinas to raise slightly Mexico’s minimum wage of about 65 cents an hour and to at least promise to enforce that country’s anti-pollution and worker-protection laws, which, while as good or better than our own, are generally ignored.

Those concessions by Salinas might, only in theory, reduce Mexico as a magnet attracting U.S. companies and thus reduce opposition to the treaty here.

Next, Clinton wants Congress to pass implementing legislation to ease the pain U.S. workers will suffer unless NAFTA is drastically altered. That could involve such obvious measures as more job retraining and extended unemployment benefits.

It could also include laws such as one giving U.S. workers the right to take legal action to force U.S. companies doing business in Mexico to abide by what Clinton believes will be Mexico’s strengthened labor and environmental laws.

Another part of his strategy is said to be, in effect, an effort to “buy off” NAFTA opponents, as one critic put it. For instance, he is already pushing his plan to let Vice President Al Gore lead a vigorous campaign to toughen our own environmental rules to at least mollify powerful congressional critics such as House Majority Leader Richard Gephardt, who sees Mexico pulling down our environmental standards.

Then Clinton hopes to reduce labor’s vehement opposition to the treaty by pressing Congress to help unions reach several of their goals.

He has already promised to push for a law to ban the permanent replacement of strikers. He probably will advocate mild labor law reforms to take away some of the tremendous advantages management now has in fighting for a “union-free” environment.

Also, Clinton is expected to appoint government agency administrators who will reverse the anti-union policies of the Reagan-Bush years and strengthen enforcement of health and safety laws.

Make no mistake about it, U.S. companies are ready to shift more jobs to Mexico. In a recent Wall Street Journal survey, more than 40% of 455 U.S. business executives said they are likely to shift some production to Mexico if NAFTA is ratified. A quarter of them said they plan to use the threat of moving to Mexico as a bargaining chip to get concessions from unions here.

Many U.S. labor leaders believe that Clinton will push Congress for NAFTA approval with or without their support. They believe that their best course is to negotiate with him as an ally to get, as one put it, “the best deal we can through the compromise the President wants.”

But others, such as William Bywater, head of the International Union of Electrical Workers, are scornful of compromises they believe will not stem the flow of jobs to Mexico.

He says many unions and their allies are planning massive demonstrations across the country against NAFTA.

If opponents of the treaty do put pressure on Clinton with massive public demonstrations and get help from leaders such as Gephardt and Perot, they could derail the treaty former President Bush and his aides concocted to help corporate America, regardless of the harm it does to workers.