Salinas’ Vision: After NAFTA, the World : Trade: Mexico is investing heavily to improve the environment for foreign business, and Asia is welcome to complete the Pacific circle.

Mexican President CARLOS SALINAS de GORTARI will meet Friday with President-elect Bill Clinton. The following is from a recent interview with Salinas by Nathan Gardels, editor of Global Viewpoint.

Question: One of the big concerns in the United States is that, under NAFTA (the North American Free Trade Agreement), Japan and other Asian countries will use Mexico as a platform to export into the United States from Mexico what they couldn’t export from their home base because of import restrictions. Do the “domestic content” requirements of NAFTA vitiate that concern?

Answer: Look, Mexico is interested in Asian investments under NAFTA not so that Japan and other countries can have a springboard to re-export their goods “through the back door” to the United States or Canada. On the contrary, we entered NAFTA because we want value-added production in Mexico so that additional employment opportunities can be created. In a sense, the whole point of NAFTA for Mexico is to be able to export goods and not people. That means creating jobs in Mexico.

I believe that goal can be assured by the “rule of origin” or “domestic content” specifications of NAFTA, which require that most of the work and material in products we export come from here. The rule of origin is not against someone. It is for jobs in Mexico.

Q: Bruce Babbitt, the former Arizona governor who is slated to become U.S. secretary of the interior, has worried that trade agreements like NAFTA or GATT (the General Agreement on Tariffs and Trade) would “harmonize environmental standards downward” because the United States’ high standards would be regarded as non-tariff trade barriers. How will you respond to these concerns?

A: I would say that NAFTA is the greenest of any trade agreement to date. . . . Mexico’s commitment to a better environment, however, does not arise just because of the pressures of NAFTA, but because of the very strong social demand that has arisen in recent years in Mexico. . . . Letters (I receive) from children are almost always about the environment. That is why we are committed to stopping industries that harm the environment from coming to Mexico.

We are also toughening the enforcement capabilities of the federal government to assure that new, tougher laws will be implemented . . . (and we are) dramatically increasing financial resources devoted to cleaning up the environment. In Mexico City, we are spending $4 billion dollars; on the border with the United States, we are spending half a billion dollars.

I really believe that on the environment, Mexico and the United States are finally on the same track. And NAFTA will also help in this regard. A country that is stricken by poverty will automatically destroy the environment. A country that can lift itself out of poverty at least has a choice.

Q: You’ve spoken recently about an investment or development bank to help even out the vast disparity between Mexico and the United States, as freer trade moves forward under NAFTA. Can you say a little more about this?

A: I have not spoken about a bank. I have said that NAFTA is the first trade agreement to go into effect between two economies of such different levels of development without any financial provision for the less-developed country.

Despite this, Mexico is channeling more money toward the environment, more money toward infrastructure, and more to improve the quality of life. Look at what we have done to find the resources. We have increased the tax on gasoline by 50% in real terms. Mexico is an oil-exporting country, and the price of gasoline is higher than in the United States and Canada! . . .

Q: The American economist Lester Thurow has made the point that any preferential trade agreements that include some and exclude others--the European Community as well as NAFTA--are incipient trade blocs in technical violation of the global free trade aims of GATT.

Indeed, the fear among East Asian economies of being shut out of North America has prompted Malaysian Prime Minister Mahahtir Mohammed to propose an East Asian Economic Caucus to stay competitive in the world economy. Will NAFTA impede trade with those outside North America?

A: As I told Prime Minister Mahahtir when he visited Mexico, NAFTA is an open trading area, not a closed trading bloc. Closed trading blocs would be a prelude to trade war, and that would be a disaster for everyone.

Our objective at all times during the (NAFTA) negotiations was to make the agreement consistent with GATT. This insures that no protectionist barriers against outside countries or regions will be erected around the huge North American trade area. NAFTA is thus a building block of GATT, not a trade bloc formed at the expense of others. . . .

Mexico is not opposed to the establishment of other economic areas. Indeed, we believe that movements toward economic regionalization in Asia and elsewhere can act as a stimulus for establishing our own links with other regions of the world. . . . Mexico, let us not forget, is part of the Pacific Rim. Although Europe and Latin America are very important to us, we know that North America’s prosperity and its future are inexorably linked to the Pacific Basin. . . . The Asian Pacific region has more than a billion people, the most modern technology and the highest sustained growth rates of any place in the world. We don’t want to be left out . . . .

Q: The former prime minister of Singapore, Lee Kuan Yew, has said that Singapore, Hong Kong, Taiwan and others should belong to NAFTA. Is that possible?

A: I don’t see the problem as long as there is reciprocity. If those countries want to meet all the conditions of NAFTA, then they will meet all the conditions of GATT for open, multilateral trade.