PERSPECTIVE ON FREE TRADE : Don’t Serve Up Half a Loaf : To pass muster, Bush’s treaty needs negotiated provisions on worker displacement, wages and environmental controls.

Life, it has been said, is a paradox; every truth has its counterpart that contradicts it. President Bush is about ready to step into a free-trade paradox. The President wants a diplomatic victory before the November election, and he is hoping to initial a North American free-trade agreement with the governments of Mexico and Canada to advance that cause.

But by settling for a flawed agreement--one that omits essential environmental controls, worker adjustment policies, protections for American and Mexican workers, and incentives for American manufacturers to remain in the United States--he may well undermine the cause of reducing barriers to trade in our hemisphere and thwart the foreign-policy credential that stands at the center of his campaign for another four-year term.

President Bush approaches this negotiation with an archaic understanding of trade. His goal, which is worthy, is to reduce tariff barriers to trade in our hemisphere. But there are new circumstances that apply especially to the U.S.-Mexican relationship that contribute to the loss of American jobs, the degradation of our shared environment and the ability of workers on both sides of the border to improve their standards of living as economic change sweeps this hemisphere and the world. And these are precisely the concerns that President Bush is ignoring in his rush to conclude the free-trade treaty.

There are people on both sides of our border who live in abject poverty amid environmental degradation. I’ve visited shantytowns, known as colonias, where families are living in squalor, in cardboard homes without sewage or running water. Children lie sick with dysentery. Families use empty drums that once held toxic chemicals to hold the water they use for drinking, cooking and washing. Mexicans move from their nation’s interior and congregate in these communities because they are havens for U.S. corporations that have moved their jobs, their profits and their operations to Mexico.

More than 2,000 of these U.S.-run maquiladoras have been created in Mexico, employing almost half a million people. These workers make cars, electronics equipment, elevator controls and other competitive products. Yet, despite their productivity and skills, these Mexican workers are often paid less than 75 cents an hour. This disparity between U.S. and Mexican wages is a powerful incentive for American corporations to move south.

And this they have done. We have been losing thousands of jobs to Mexico as American companies relocate to take advantage of lower wage rates and lax enforcement of environmental, health and labor laws. For example, just this week, the last American manufacturer of typewriters, Smith-Corona, closed its factory in Cortland, N.Y., and moved to Mexico. In Springfield, Mo., 1,200 Zenith employees lost their jobs this year when their plant moved to Mexico. The furniture industry, which once provided good-paying jobs to the residents of inner-city Los Angeles, has similarly moved south to take advantage of lower Mexican wages and laxer environmental regulation.

A good free-trade agreement would lower tariff barriers but also include provisions to finance needed improvements in infrastructure and protections for the rights of Mexican workers. A comprehensive accord would raise environmental and labor standards in Mexico. A far-sighted pact would include comprehensive provisions for worker adjustment and retraining--much like those operating in the newly integrated European Community--to ensure the livelihoods of American workers who are displaced by the impact of a free-trade agreement. This would rally those people most harmed by the impact of free trade to the cause of expanded global commerce.

In sum, properly negotiated, this agreement could live up to its advance billing as a blueprint for expanded economic growth and social justice throughout the Western Hemisphere. Yet none of these concerns are resolved by the draft accord President Bush wants to sign before the election.

When a similar free-trade arrangement with Canada was presented to us, Congress found flaws in the draft treaty that President Reagan had negotiated. We sent his team back to the negotiating table and reworked the most objectionable parts that could have caused the agreement to be defeated. Similarly, the President could tell Carla Hills, the U.S. trade representative, to find common ground with her Canadian and Mexican counterparts that could save this agreement.

Woodrow Wilson was crushed nearly a century ago by the failure of the Senate to enact the League of Nations. Beleaguered by a stagnant economy and Soviet adventurism, Jimmy Carter suffered an additional political setback when the Senate declined to take up the SALT II treaty. President Bush will similarly founder if he fails to submit a North American free-trade agreement that comprehends the challenges America faces in the new global economy. Paradoxically, the President would do better politically by forsaking the short-term gratification of signing a flawed free-trade agreement now to look after the long-term economic interests of the United States.

FO RICHARD A. GEPHARDT