Impact on Environment Questioned : Reaction: But even some environmentalists said the talks marked a turning point by linking trade issues with environmental concerns.

Even before the ink dried Wednesday on a proposed North American Free Trade Agreement, strikingly different views were offered by the Bush Administration and environmentalists on how well the treaty would guard against industrial pollution.

“I’m fearful all the talk about the environment and the treaty is just window dressing, on the same level with Bush claiming to be the ‘environmental President,’ ” said Larry Williams, director of international programs for the Sierra Club. He said Congress should reject the accord unless negotiators correct “serious flaws” in the agreement.

But, U.S. Environmental Protection Agency chief William K. Reilly hailed the pact as “the most environmentally sensitive trade agreement ever negotiated anywhere. It will be seen as a model for other countries.”

While there was widespread disagreement over how effective environmental safeguards would be, even some environmentalists acknowledged that the North American trade talks marked a turning point by closely linking trade issues for the first time with environmental concerns.

U.S. Trade Representative Carla Anderson Hills said the accord would:

* Permit the United States to maintain stricter health, safety and environmental standards and the right to prohibit imports that do not meet U.S. standards.

* Protect the right of state and local governments to enact tougher standards.

* Allow all three nations to impose stringent environmental standards on investments so long as they apply equally to domestic and foreign investors, while renouncing the lowering of standards to induce investment.

The pact also “encourages” the United States, Canada and Mexico to harmonize their health and environmental standards by strengthening the weakest among them, not watering down the strongest.

Environmentalists remained wary Wednesday even as some conceded that the treaty contained some “positive features.”

Others, including the private Natural Resources Defense Council, had major reservations over the absence of any provision earmarking a portion of the increased trade revenues for strengthening Mexico’s fledging environmental enforcement programs--a view shared by key Democrats in Congress.

“We must do more to link environmental protection with the economic integration of North America,” said John Adams, executive director of the resources defense group.

Mary Kelly, director of the Texas Center for Policy Studies who earlier testified before Congress on the pact, challenged Reilly’s upbeat assessment of the treaty.

“I agree it is the most environmentally sensitive trade agreement--even if it just mentions the word ‘environment,’ ” Kelly said. “But it is not the best we can do. . . . The disparity between the damage our industry can cause and the ability Mexico has to control that damage is really great.”

Despite assurances that U.S. environmental laws would not be weakened by the pact and that Mexico had pledged not to lower its own standards to lure U.S. industry away to pollution havens south of the border, environmentalists continued to worry. Not only are federal laws at stake, they charged, but tough state regulations like California’s Proposition 65--the voter-approved toxic labeling law that exceeds federal requirements--also are at risk.

Separate from the trade talks, the United States and Mexico have agreed to fashion an environmental plan for the border. Mexico has allocated $460 million during the 1992-94 phase, and the United States committed $240 million this year. In addition, U.S. negotiators published last February a review of U.S.-Mexico environmental issues that attempted to pinpoint the possible impacts of a trade treaty on the environment to guide talks.