PERSPECTIVE ON FREE TRADE : California’s Prosperity Is at Stake : Can the Administration negotiate a deal that secures economic gain and more? It’s worth letting them try.

Congress’ vote on whether to authorize “fast track” negotiations on free trade with Mexico will be important by anyone’s standards. For Californians, it will be critical. Because of the sheer size of our economy and our proximity to Mexico, we have more to gain--and more to lose--than any other state.

Since 1986, when U.S. trade with Mexico was moderately expanded, California’s annual exports to Mexico have soared. Between 1987 and 1989, according to the U.S. Department of Commerce, our state’s agricultural exports to Mexico increased from just under $37 million to more than $100 million annually; in 1989, our manufactured exports increased from $2.1 billion to nearly $4 billion.

These and other statistics indicate clearly that our state’s economy benefits from thriving and expanding export markets. Mexico, as the world’s third-largest purchaser of California products, is an essential part of our economic future, and the increase in California exports to Mexico over the past five years illustrates the potential for even greater economic gains under a U.S.-Mexico free-trade agreement.

Such an agreement would affect nearly every segment of the state’s economy. Admittedly, some industries would suffer, but others would gain. The onus is on each senator and representative to determine whether the potential gains from a Mexican/North American free-trade agreement would outweigh the short-term losses that are certain to occur. Balancing competing interests is never easy when the final determination may cause injury to even one industry or individual.

Even more difficult is determining whether we are willing to give the Administration autonomy to negotiate a pact that will reflect, strongly and accurately, our concerns regarding human rights, jobs and the environment. To that end, the Administration has attempted to allay congressional concerns by promising to pursue a series of side agreements on these issues, to be negotiated concurrently with, but separate from, the actual trade agreement.

I must confess to a certain amount of skepticism regarding the Administration’s ability to gain concessions on these important parallel issues. In addition, should parallel agreements be reached, the Administration’s ability to enforce such agreements is also questionable. Finally, from a practical standpoint, the fact that such important issues are not directly linked to the actual trade agreement may prevent any trade agreement from receiving final congressional approval.

On balance, however, I think the Administration has presented a fairly detailed, responsive plan of action, seemingly made in good faith, which goes a long way toward allaying congressional concerns regarding the parallel issues. The question overshadowing all others, however, is one of long-range economic opportunity. As trade becomes global, can the United States afford to turn its back on trade opportunities with our southern neighbor? Can we stand by, watching the creation of European Economic Community and the consolidation of the Pacific Rim bloc, and not take advantage of our regional trading opportunities?

A U.S.-Mexico free-trade agreement could open new markets for our state’s industries, create new jobs for Californians, and improve the Mexican economy and thereafter Mexican labor and environmental standards. In addition, the achievement of a North American agreement would establish a coalition with enough size, diversity and efficiency to compete effectively with the European Community and the Far East.

If the Administration can reach a trade agreement with Mexico that does not sacrifice U.S. standards or principles, such an agreement should be pursued. Without fast-track authority, however, prospects for a trade pact vanish before negotiations even begin.

With fast-track authority there is a possibility to improve U.S. competitiveness and to provide California businesses with expanded markets and economic opportunities. Without it, those opportunities will be unnecessarily delayed and may even remain unexplored, and our state and our nation will be hard-pressed to stem mounting trade deficits and declining economic stature.

I frankly do not know if the Administration is up to this task. I do not know if it can present Congress with a U.S.-Mexico free-trade agreement that we can accept--but it should be given the opportunity to try.