Pact With U.S. Regarded as Boost to Mexican Wages : Trade: First, however, oil exports and foreign investment would have to be increased, a private forecaster in Mexico says.

Mexico must increase oil exports and permit foreign investment in all industries, including oil production, if a free trade agreement with the United States is to improve workers’ wages and the country’s economy, according to preliminary results of a forecast to be published this spring.

The study disputes the common belief that a free trade agreement will turn Mexico into little more than an industrial park for low-wage, labor-intensive manufacturing. Instead, it predicts that a closer relationship with the U.S. economy could make Mexican industry more productive, leading to higher pay in a country where the minimum wage is about $4 a day.

The forecast by Rogelio Ramirez de la O, director of Ecanal, a Mexico City economic analysis firm, is one of the first independent studies on the impact of the free trade agreement that U.S. and Mexican officials are scheduled to begin negotiating this year. It will appear in a book with other articles that will analyze the effects on the United States and Canada, nations that signed a free trade agreement two years ago.

A spokeswoman at the Mexican Commerce Ministry said the department’s policy is not to comment on statements by outside analysts. However, government officials repeatedly have denied that they will open Mexican oil fields to foreign investment.

Ramirez de la O is anticipating that Mexico will import far more than others, including the respected Wharton Econometric Forecast, predict.

Other economists beginning similar studies said his conclusions seem reasonable economically but questionable politically.

Based on past performance of the Mexican economy, Ramirez de la O projects that a free trade agreement will accelerate the surge in imports that has occurred since Mexico began lowering trade barriers nine years ago. Mexican industry will be forced to import machinery and components to compete with U.S.-made products in a unified North American market, he said.

Although the resulting improvements in quality and price would allow Mexican non-oil exports to double to $32 billion in the five years after an agreement is signed, that will not be enough to offset imports, which will nearly triple to $67 billion, he predicts.

Mexico will have to export more oil to minimize the deficit. At the same time, expanding domestic industry will demand more fuel. More oil will have to be pumped.

“The need for massive investment in the oil sector is therefore self-evident,” said Ramirez de la O.

Even if oil exports double, Mexico will be left with a $15-billion trade deficit, five times the 1990 deficit. To pay for its imports, it will need $7 billion to $10 billion a year in foreign investment.

“It is hard to imagine foreign investment in such magnitudes without a major opening to private investors in the energy sector,” Ramirez de la O said.

Christopher Jacob, director of international marketing at Polyconomics, a New Jersey publisher, agreed. “There is definitely going to be a deficit. A developing nation has to have more capital coming in than going out.”

However, he questioned whether Mexico will modify its prohibitions against private-sector--much less foreign--investment in oil production, which has been a government monopoly for 53 years. “I’d like to see it happen,” he said, “but it may be wishful thinking.

“Policy changes are not occurring as rapidly as we had been told they would,” said Jacob, referring to income tax laws and constitutional restrictions on foreign investment.

Because Wharton forecasts a more modest increase in imports--$50 billion by 1995--its economists predict that steady oil exports and foreign investment of less than $7 billion a year will easily offset purchases abroad.

Wharton does not anticipate further loosening on foreign investment, said Lucinda Vargas, international service director.

Ramirez de la O said complex econometric models, such as Wharton’s or those of previous Mexican administrations, are ill-equipped to anticipate the effects of sudden policy changes. That is part of the reason Mexican government projections have consistently underestimated imports, he said.

Still, he acknowledged that the government may not implement policies that are logical to an economist.

“It is possible indeed to increase Mexican exports based on low wages and a more intense use of existing plant, but this scheme would not lead to a rapid growth of domestic markets based on higher wages,” said Ramirez de la O.

To pay workers better, industry must become more productive by importing more sophisticated equipment, he said. Even at the import levels he projected, it will be a decade before Mexican workers recover the buying power they lost during the 1980s, he said.

Raising wages will require major economic reforms, he said, “admittedly more difficult than simple increases in labor-intensive exports.”

However, he said, “a substantial part of the cost of transforming a closed into an open trade economy has already been incurred. . . . The transformation of Mexican industry has already begun.”