Mexico’s Pollution Cleanup Tied to Trade Pact : Environment: Analysis by U.S. concludes that neighboring country will not have the political or economic incentive to help pay for improvements along the border if Congress rejects the agreement.

Mexico will have neither the money nor the political incentive to join the United States in carrying out an unprecedented plan to clean up the ravaged border environment if Congress rejects a controversial North American free trade agreement, a detailed new analysis by U.S. trade negotiators has concluded.

The U.S.-Mexico border environment plan, announced Tuesday by President Bush during a campaign swing in Los Angeles, calls on the two nations to spend $850 million in the next three years to redress severe environmental and health problems brought about by the rapid industrialization of the 2,000-mile border during the past 20 years.

The 10-year plan commits Mexico to a series of new initiatives to step up enforcement, strengthen its anti-pollution laws and undertake with U.S. officials inspections of factories on both sides of the border. For its part, the United States plans to spend $380 million, principally for sewage treatment plants.

The border proposal is a key element in plans by President Bush and Mexican President Carlos Salinas de Gortari to win congressional approval for a North American free trade pact among the United States, Canada and Mexico. The agreement would create a $6-trillion market stretching from the Yukon to the Yucatan.

But, a 231-page analysis of border environmental problems by the office of U.S. Trade Representative Carla Hills has warned that it will be far more difficult for Mexico to live up to the commitments contained in the border environment plan if the trade pact is rejected.

Hills’ analysis said that already formidable problems of raw sewage, air pollution, unsafe drinking water and toxic emissions would likely worsen without a free trade pact than with one, and that the effects would be felt by U.S. cities along the border with Mexico.

“In the absence of a (free trade treaty), Mexico may have less incentive to fully develop and enforce its environmental, legal, and regulatory regime” that would reduce impacts on the United States, the report said.

In the case of air pollution, the report said that without a pact, it would “probably be impossible” for Mexico to make good on its commitment to clean air initiatives along the border, much less maintain minimum existing levels of enforcement.

Several U.S. cities, including San Diego and El Paso, are affected by air pollution that blows across the border from Mexico. Political considerations, the report said, may lead the Mexican government to target its scarce resources on Mexico City and other large, interior cities, where voters and industry are concentrated.

Martin Torres, a spokesman for the Mexican consulate in Los Angeles, offered assurances Wednesday that Mexico’s $460-million commitment during the next three years was guaranteed, regardless of what happened to a free trade pact. But, he added, “What’s going to happen later, we don’t know.”

Even with the trade agreement, Mexico’s participation would be limited because it has failed to channel funds earned by the border industries into environmental controls, said Dick Kamp, executive director of the Arizona-based Border Ecology Project. “(The trade treaty) is never going to provide that money, any more than trade and investment ever has,” Kamp said. “I think Mexico is promising money that it doesn’t really have.”

Kamp said he believes Hills’ report is intended to be “a club hanging over our head” to wrest votes out of Congress. “I personally greatly resent even responding to that type of politics,” he said.

Hills’ analysis clearly reaffirmed the Bush Administration’s long-held view that border environmental problems would worsen without a free trade pact than with one.

The study said that without a trade agreement, U.S. and other foreign companies locating in Mexico would have to continue restricting their operations to a 65-mile-wide band on the Mexican side of the border. This would continue to concentrate environmental and health problems in the border region instead of allowing investment deeper in the Mexican interior.

Nonetheless, the report acknowledged, there would be some “profound” increases in pollution in the first 10 years of a free trade pact, even with aggressive inspections and enforcement.

In the most optimistic scenario, industrial emissions along the border would jump from 40% to 250% over 10 years, depending on the magnitude of industrial growth.

“With aggressive inspections and enforcement, the industrial emissions might still rise 20% to 150% in 10 years,” the report said. But without a free trade agreement industrial emissions could jump between 60% and 320% in the same period.

“Regardless of which (scenario) proves to be most accurate, the number of Mexican pollutant-emitting facilities will increase. This will prompt Mexican commercial and residential pollutant increases that will affect the U.S.,” the report said.

Over the longer term, however, the border environment plan is supposed to reduce the impact on the environment through building new sewage treatment plants, drinking water plants and instituting controls on emissions and hazardous wastes.

During a news conference in Los Angeles on Tuesday, Hills dismissed concerns that a free trade pact would lead to an exodus of U.S. companies looking for a “pollution haven” in Mexico. Studies by her office found that environmental compliance costs on average account for 1% or 2% of a firm’s costs of doing business.

She added that in view of Mexico’s commitment to step up its enforcement and to model its enviromental laws after those in the United States that it would be “foolhardy” for companies to flee south.

Approval of a free trade pact by Congress is seen as an uphill fight. Coming as it does during a recession, the pact is viewed with concern by many members of Congress who worry that jobs will be lost to Mexico. Others have worried that air and water pollution, toxic emissions, and health problems will worsen if trade is liberalized with Mexico.