MEXICO : Progress and Promise : Regional Outlook : Latins Forging Vision of 2-Continent Market : * They worry that if they don’t act quickly, they will miss the free trade ‘bus’ with the United States.

Mexico’s negotiations to join the United States and Canada in a free-trade agreement are whetting the appetites of other Latin countries.

Chile wants in, too--and soon. So does Colombia. Virtually all countries in the region, except for Communist Cuba, endorse President Bush’s Enterprise for the America’s Initiative, a proposal for a free-trade area that would stretch from Alaska to Tierra del Fuego.

It would be an economic community to rival Europe’s, and the U.S.-Mexican negotiations are seen as the key first test of the concept in Latin America. Some countries, however, don’t want to wait for the results of that test to join the North American market themselves.

“What is clear is that there are countries in Latin America--I would say Chile is the most clear example--that are ready and indeed anxious to begin a negotiation process,” said Gert Rosenthal, executive secretary of the U.N. Economic Commission for Latin America and the Caribbean.

“They’re pushing,” Rosenthal said. “There is a perception that Mexico is getting into a moving bus which the others might miss if they don’t move quickly.”

Export-oriented Latin Americans see duty-free, unrestricted access to the rich U.S. market as their chance to follow in the pawprints of the “Asian Tigers”--Taiwan, South Korea, Hong Kong and Singapore--that have prospered, thanks to export booms. The sooner they get in, many believe, the more fields of opportunity for sales they can stake out.

The others, however, apparently are going to have to wait. The signals from Washington indicate that free-trade negotiations with other Latin American countries will not begin until an agreement is reached with Mexico.

The expected delay is frustrating for countries on the back burner, but Rosenthal called it realistic. “These are very complicated negotiations,” he said. “They provoke adverse reactions among certain constituencies, and I really doubt whether the U.S. government could in practice carry out more than one negotiation at a time.”

Luis Eduardo Rodriguez, a Colombian economist who specializes in international trade issues, said an agreement between the United States and Mexico would be an important test.

“But clear results cannot be expected in the short term,” Rodriguez said. “The problem is that while we will see immediate effects in both countries, the long-term impact will not be known for five years or more.

“From this point of view it would be a mistake for the United States to wait for such results before extending the free-trade initiative to other Latin American countries. With such a policy, the United States would be running the risk that the initiative would stagnate, especially in a country like Colombia, which is so impatient to move ahead.”

Rodriguez is an investigator with the Center for Studies on Economic Development at the University of the Andes in Bogota. He observed that President Cesar Gaviria has moved rapidly to implement a free-trade policy, opening up Colombia’s economy to foreign investment and lowering customs barriers.

“It is clear that he expects, in fact he needs, immediate results to keep the program moving forward,” Rodriguez said. “I think this situation is similar to that in other South American countries.”

An obvious comparison is with Chile. Augusto Aninat, an economic consultant who was director of international trade relations in the Chilean Foreign Ministry until this month, said Chile also has made major efforts and sacrifices to open up its previously protected economy to foreign competition.

“Chileans feel prepared to reach an agreement with the United States,” Aninat said. “How can the Americans say no? I believe they are going to have to meditate on this.”

He said Washington may not be prepared to negotiate with all Latin American countries at once, but it could negotiate with two, Mexico and Chile. And because Chile is much smaller than Mexico, negotiations with this country might be simpler and faster, with less opposition from U.S. producers and labor unions that fear competition from low-paid Mexican labor, he added.

If the Americans reach a quick agreement with Chile, Aninat said, “they have an immediate, concrete case for the Enterprise for the Americas Initiative to become a concrete reality.”

When Mexico announced its intention to join the North American Free Trade Area last year, officials of many Latin American countries were privately critical. They accused Mexico of turning its back on Latin American to cut its own sweetheart deal. But since then, Mexico has opened the door to separate free-trade agreements with other Latin American countries such as Brazil, Colombia, Venezuela and Central America nations.

Chile and Mexico recently signed a free-trade agreement that will reduce customs taxes on most goods traded between the two countries by 1996. Aninat said that agreement has helped restore Latin American confidence in Mexico’s solidarity with the region.

Luis Maira, a Chilean analyst with the Latin American Institute for Transnational Studies, said Mexico has made special efforts to show that its negotiations with the United States are not conducted behind Latin America’s back. In the Chilean-Mexican free-trade agreement, he said, “Mexico has made important concessions to accentuate its ties to Latin America.”

Because Mexico’s market is several times larger than Chile’s, the Chileans potentially have more to gain from reciprocal free access.

Maira, a Socialist and former congressman, spent 10 years in exile in Mexico, and his institute has offices in both Santiago and Mexico City. He said Latin Americans need to understand that the Mexican economy is already heavily integrated with the U.S. economy, and Mexico’s big and growing market is by far the region’s most attractive one for the United States.

It will take the United States two or three years to complete free-trade negotiations with Mexico, Maira predicted, and “only then will it enter negotiations with the other Latin American countries.” So those countries are having to readjust their expectations.

But Latin Americans will wait, according to Maira, because an agreement with Washington is their only chance for getting aboard the free-trade trend that is changing world economic relations.

Not all countries in the region, however, are in any shape to sign free-trade agreements with the United States. Brazil and Peru, for example, are still ravaged by inflation and other internal economic problems that would make it difficult for them to meet U.S. conditions for joining. The United States is not interested in negotiating with countries that have unstable currencies, subsidized industries, heavy restrictions on foreign investment, and delinquent foreign debts.

And some countries seem to be more concerned for the time being with developing sub regional free-trade groups, which Bush has said may negotiate with the United States as blocs once they are formed.

“Now we will be working to strengthen the Central American Common Market,” said Francisco Javier Ibizate, a Jesuit priest and economist at the University of Central America in San Salvador, referring to a decades-old project to fashion a regional free-trade grouping in that area. “I don’t know how we will be affected by an alliance between the United States, Mexico and Canada, only that it makes it necessary to reinforce the (regional) Common Market.”

Carolina de Franco, another economist with the University of Central America, said some analysts believe the small countries of Central America “can survive only if Mexico can be a trampoline to send Central American products to the United States.” But she said that strategy would run into U.S. and Mexican regulations to exclude products made outside the North American free-trade zone.

“Others are hoping that Central American products will be counted as produced in Mexico,” De Franco said. “There is also hope that with Mexico focusing on the selling to the United States, Mexican markets, particularly in the south, will be open to products from Central America.”

Times staff writer Kenneth Freed in San Salvador and special correspondent Stan Yarbro in Bogota contributed to this report.

* ABOUT THIS SECTION

The principal writers for this special report on Mexico were Marjorie Miller and Juanita Darling of The Times’ Mexico City Bureau, and Richard Boudreaux of The Times’ Managua Bureau. Don Bartletti, of The Times’ San Diego Edition, took the photographs.