PERSPECTIVE ON FREE TRADE : Mexico Jumps In With Eyes Shut : The country yearns to be modern, but debate on the treaty is foreclosed. An abysmally unequal partnership is in store.

As details of the proposed North American free trade agreement emerge, one of the less subtle differences among the participating nations stands out: the contrast in the way public opinion is reacting to the entire process. While there is considerable debate in Canada about the merits and drawbacks of free trade, and a fair amount of discussion along similar lines in the United States, there seems to be virtually unanimous support for the deal in Mexico.

In fact, the matter is more complicated. Absence of public criticism does not signify broad consensus. The authoritarian nature of the Mexican political system makes free-wheeling debate virtually impossible. The mass media are closed to dissenting voices; only small-circulation dailies or weeklies run contradictory views.

It would take a free, well-informed debate in a highly educated society to point out the half-truths and unacknowledged trade-offs in the arguments for the agreement. Mexico will demonstrate its modernity only when the logical, predictable differences on an issue of this magnitude are dealt with openly, in a civilized fashion.

The government’s basic line on behalf of free trade is strong and plays to real hopes and fears of the Mexican people. Beyond the rhetoric and overblown prognosis, its arguments can be boiled down to two theses: The North American free trade agreement is necessary for Mexico because there is no alternative; and it is desirable for Mexico because it is a ticket to modernity.

The first point is, on the surface, inarguable: If the world is dividing into trading blocs, Mexico’s only choice is North America. Moreover, that choice has already been made. Most of the country’s trade, investment and credit is with the United States. This ties in with the desirability argument. Through tighter links with the north--through jobs, investment and as a consumer of American goods and services--Mexico, according to the government, while maintaining its identity and independence, will join the “First World.”

It is difficult to grasp how powerful this message is among a people that have lost a full decade to economic stagnation and have traditionally identified modernity with closeness to the United States. This is why so many Mexicans, in public opinion polls and everyday conversations, are of two minds on the free trade agreement. Large majorities support it, while at the same time believing that Mexico will benefit less than the United States.

In the business community, though, as shown in surveys carried out by American research firms and in private statements by business leaders, serious doubts are emerging. The free trade proposition was always simple: Some firms would be or would become competitive; others would not. Those that did would survive; the others would go under, replaced by more efficient ones.

The Mexican economy has already been exposed to the rigors of international competition for more than four years. And many businessmen are realizing that very few firms will end up being competitive; a huge number will go under, and the transition to efficient business operations will take much longer than expected. Although the data are subject to different interpretation, as long as Mexican imports grow three to four times as fast as exports, and as the trade gap reaches 6% of gross domestic product, instead of a planned and sustainable 2%, there is an undeniable problem. As Luis Rubio, a staunchly pro-treaty commentator, has pointed out, the main Mexican exports that are holding up are those that are state-owned or -protected.

Some Mexican businessmen are publicly optimistic about their ability to survive and even thrive in foreign competition. But in private, many worry about having to sell out to foreign competitors, becoming junior partners or mere retailers of products made abroad. Their fears are warranted, and can be eased only by government policy, which is sadly lacking.

The best indication of this spreading gloom is the attention being paid to a new, rabidly anti-free trade book by Jose Angel Conchello, a distinguished pro-business leader of the right-of-center opposition, who makes many arguments that one would expect to hear from the nationalist left.

The doubts on the left are also real, and they will be less lightly dismissed as time wears on. The objections focus on nuts-and-bolts issues of the threat to Mexico’s autonomy in economic and cultural policies. But they also express the more intangible fear for our unfinished nation’s soul and survival.

Formal economic integration entails foreign and economic policy convergence. Countries linked on some issues cannot go in radically opposite directions on others. In the case of the European Economic Community, sufficient (if barely so) similarities prevailed among the founding nations to make the additional convergences less painful. But in the case of Mexico and the United States, the distance between the two is so great that convergence will be very painful. It is one thing (and not a simple one, for that matter) for Belgium and Italy to follow similar economic and social policies. It is a far different affair for Mexico and the United States to do so, when their economic and social structures and roles in the world are abysmally unequal.

The most important, unspoken expression of Mexico’s ambivalence about the free trade linkup lies in the nation’s doubts about its own construction. For decades, Mexicans have boasted of their strong national identity, cultural personality and mestizo homogeneity. But go beyond mariachis and tacos, and there is something unnerving about a society that systematically rejects any insinuation of unfinished nation-building, ethnic discrimination or cultural insecurity. If Mexico is as complete as Mexicans assert it to be, then fears of free trade are largely unfounded, whatever the practical consequences turn out to be. Conversely, if the country’s construction as a national entity is far from solid and it is indeed vulnerable to multiple fractures, the North American free trade agreement can be its undoing.

This is the reservation that any Mexican, pro- or anti-free trade, must have as union with the north approaches.