CALIFORNIA ELECTIONS / U.S. SENATE : Free Trade Pact Emerging as Key Campaign Issue

The North American Free Trade Agreement, a pact designed to open markets in Mexico, Canada and the United States but which also threatens some U.S. jobs, has emerged as a clear dividing line between Republican and Democratic candidates for the U.S. Senate in California.

In a state that stands to benefit--or suffer--more than most once the treaty is enacted, candidates are forced to weigh divergent interests to stake their positions.

Republicans John Seymour and Bruce Herschensohn are enthusiastic supporters of the free trade agreement, saying it will help California’s economy grow, expand markets for California-produced foods and goods, and curb illegal immigration from Mexico.

Democrats Dianne Feinstein, who is running against Seymour, and Barbara Boxer, who opposes Herschensohn, say they cannot support a treaty that does not include specific measures for protecting jobs and the environment. Both express concerns that the pact will force too many Americans out of work and that the treaty won’t have the teeth to stop Mexican-based businesses from polluting the border.

The free trade pact is increasingly a campaign issue in California, as union activists, farmers, Mexican-American groups and business leaders all want to hear where the Senate candidates stand.

“Philosophically, it’s right,” said Herschensohn, a conservative ex-commentator for radio and television, in an interview. “This isn’t called the Utopian Trade Act. There are short-range liabilities . . . but in the end, this is good, and it matches our philosophy as a nation.”

His opponent, liberal five-term Rep. Boxer, disagrees: “It could be the biggest invitation to losing jobs. . . . I will oppose a free trade agreement written by President Bush unless it addresses jobs, the environment and (the impact on) small business.”

The landmark pact, unveiled in August after 14 months of talks by the governments of the United States, Mexico and Canada, must be ratified by the legislative bodies of each nation before it is enacted.

A vote by the U.S. Congress could come before the Nov. 3 election. Because the agreement is so extensive, and because enabling legislation has yet to be formulated, many details of how the plan works are still unclear to most Americans.

The agreement essentially links North America’s 360 million consumers into a common, $6-trillion market by lifting or phasing out many tariffs on agricultural, automotive and other products.

Economists generally believe that some low-skilled, light-manufacturing jobs, such as garment and furniture makers, will leave the United States for low-wage Mexico, but more jobs will be created for Americans in banking, insurance and marketing.

Generally, organized labor and some environmentalists--frightened by Mexico’s lax pollution standards--oppose the free trade pact; business and big agricultural producers favor it.

Boxer, of Marin County, and Herschensohn, of Los Angeles, are competing for the six-year seat held by retiring Sen. Alan Cranston. Feinstein, former mayor of San Francisco, and Seymour, the appointed incumbent, are seeking to finish the last two years of the term vacated by Pete Wilson when he became governor.

Feinstein has used several campaign appearances to question the free trade agreement.

To dramatize what she considers the crucial issue of wage parity, Feinstein produces a pay stub from a Mexican worker earning 70-cents-an-hour at a General Motors plant that relocated to Reynoso, Mexico. She believes American businesses will move to Mexico in search of cheap labor.

“I am for free trade,” Feinstein said in an interview. “What I’m not for is a rush-through agreement between a developed nation and a largely undeveloped one where wages are one-seventh ours. . . . Wages (in Mexico) have to be built up.”

Seymour, in contrast, argues that concern over wage disparity is “asinine” because California’s technological edge will always give it an advantage in trade. He accused Feinstein of “selling fear” at the behest of labor groups.

“It is true,” he said, “Mexico will eat our lunch on wages, but our technology, our producing capability, . . . is so far superior to theirs’, that we should really not have an overall fear of being able to compete.”

Proponents of the free trade pact argue that it will spawn an economic boom in Mexico, and that as prosperity spreads among Mexican consumers they will spend more money on U.S. goods and will be more inclined to remain in Mexico to work, rather than immigrate--illegally or otherwise--to California.

“They got more pesos in their pockets, they’re gonna buy more of our products . . . and they’re gonna stay home,” Seymour said in an interview. “Absolutely!”

Pointing to the multibillion-dollar export business California has with Mexico, Seymour said he sees “tremendous economic opportunity” under the North American Free Trade Agreement, especially for telecommunications, electronics and agribusiness.

He conceded that smaller farming operations, such as tomato or other row-crop producers, will have to switch crops or phase in specialty produce in order to compete with Mexican farmers. Feinstein said such farmers ought to be protected.

Like Feinstein, Boxer is skeptical that the rock-bottom wages of most Mexican workers will rise quickly enough.

“The argument of the proponents is that as the economy of Mexico improves, the Mexican people will buy more goods,” Boxer said in an interview. “That may happen in 20 years, but in the immediate future, unless the issue of 70-cents-an-hour is addressed in some fashion, what are they going to buy?”

Boxer allows that the way of the future in a global economy is free trade. But she does not trust the Bush Administration to decide the terms.

“Do you want a Mexican free trade agreement defined by George Bush?” she asked a group of union leaders at a breakfast in a bowling alley in Fresno. “Or do you want a Mexican free trade agreement defined by Bill Clinton, who understands that we have to protect jobs?”

Feinstein also lists job security as a main concern. With layoffs in aerospace and other industries swelling the nation’s unemployment ranks, she said, can the economy absorb additional job losses?

Boxer and Feinstein say they would consider offering new training to workers who lose their jobs because of the free trade agreement.

Herschensohn, who is a staunch advocate of reducing the federal bureaucracy, said retraining workers should not be a federal responsibility.

Seymour said the 15-year period over which the free trade agreement is going to be implemented gives those workers destined to lose their jobs time to reorient and prepare for other types of employment.

All four candidates agree that the North American Free Trade Agreement must include environmental safeguards. Seymour and Herschensohn lean toward trusting that those provisions will be included; Feinstein and Boxer do not, and refuse to support a pact that doesn’t enforce tough standards.

“What I’m told is that SEDUE (the Mexican environmental-protection agency) has rules on the books, but they don’t enforce them,” Feinstein said, recalling a trip to El Centro where she watched polluted water coursing the banks of the New River. “I would want to see a mechanism” for better enforcement.

Seymour said he wants to see the treaty include “snap-back” provisions so that if Mexico does not do its part in cleaning up border pollution, other portions of the agreement could be suspended or canceled.

In addition to the dumping by Mexican-based firms of toxic wastes and other pollutants along the border, Boxer said she is alarmed by the widespread use in Mexico of pesticides that are banned in the United States.

Not only does this practice have the potential for contaminating the food chain of U.S. consumers, she said, it also puts California farmers at a disadvantage.

Seymour and Feinstein agreed that Mexico should be banned from unfair use of harmful pesticides that are outlawed in the United States.

Herschensohn said less regulation in the United States is the solution, not more regulation south of the border.

“If they have less regulation, and they do, it isn’t up to us to clobber them over the head and say you better have more regulation,” Herschensohn said.

He allowed, however, that there could be exceptions if a particularly dangerous substance was being used in Mexico.

Both Seymour and Herschensohn believe increased trade with Mexico will ultimately help to stem illegal immigration to the United States.

“The highest percentage (of illegal immigrants) . . . are coming here to feed their families,” Seymour said. “If they could feed ‘em by staying in Mexico, they’re gonna stay there. And so in the long term, I think it’s a solution to our border problem.”