PERSPECTIVE ON NAFTA : An Agenda for Clinton and Salinas : They have two months to settle such side issues as environmental protection if free trade is to win Congress’ vote.

When President-elect Bill Clinton and Mexican President Carlos Salinas de Gortari conclude their first face-to-face meeting today, let’s hope that they have made progress in two vital areas. First, they need to forge a strong personal relationship, essential for the leaders of two neighboring countries often at odds over a host of bilateral issues. They also need to agree on a strategy for winning Congress’ approval of the North American Free Trade Agreement.

In a nutshell, the two leaders should explore potential side agreements to the negotiated NAFTA treaty to confront congressional fears over job dislocation, environmental protection and worker safety rights that have been left largely unattended by the Bush Administration.

To his credit, candidate Clinton endorsed NAFTA despite enormous pressure against doing so, while adding a firm commitment to address concerns about the environment and U.S. jobs. He will have to enlist Salinas’ support in resolving these concerns if NAFTA is to pass Congress and function effectively.

In politics as well as in economics, timing is critical, and NAFTA needs to be completed as soon as possible during Clinton’s honeymoon with Congress, preferably by early summer. A delay could weaken both U.S.-Mexican relations and U.S. efforts to increase its competitiveness in world markets. From Mexico’s perspective, it would be a serious slap in the face for the Salinas government, which has invested so much of its political capital in closer economic and political ties with the United States. It could also undermine the reformist agenda of the Salinas government and aggravate Mexico’s economy just when it needs a jolt of confidence.

Years of hateful stereotyping, mutual distrust and nationalistic sentiment have kept the United States and Mexico from forging stronger relations. These historic problems have prevented closer cooperation on important issues such as trade, immigration, drugs and environmental protection, all of which impact the United States profoundly. NAFTA presents both countries with the opportunity to overcome the limitations of the past.

The foreign-policy implications of NAFTA cannot be overlooked. Political and social stability in Mexico is central to stronger U.S.-Mexican relations. While President Salinas has moved Mexico toward that possibility with amazing alacrity, the free-trade agreement is an insurance policy against a possible Mexican retreat to economic isolationism. The rest of the Western Hemisphere--Latin America and the Caribbean--is already nervous about the outcome of NAFTA and will doubt our commitment to trade expansion in the region if NAFTA falters. Clinton needs to achieve a quick and positive outcome on NAFTA to establish a credible and successful foreign policy toward our hemisphere neighbors.

On the economic front, NAFTA has benefits for both countries. For Mexico, it means jobs and foreign investment for a more secure future. For the United States, it represents a real opportunity to combine our economic strengths with Mexico and Canada to match the production-sharing strategies of Japan and the European Community and to assure economic and job growth at home. More significant than increasing U.S. exports to Mexico is the boost that NAFTA will give to U.S. competitiveness in world markets. If the United States expects to compete with Asia and Europe, we need an economic partnership with Mexico that allows our country to capture the same economic synergies enjoyed by our competitors, who have already joined with developing countries in their regions to gain competitive advantage.

With the stakes so high, Clinton and Salinas should direct their negotiators over the next 60 days to develop side agreements to address the environmental and labor issues that have made congressional support for NAFTA tenuous. After completion of these agreements, NAFTA should be ready for formal submission to Congress.

This process will test Clinton’s deftness at bilateral diplomacy. While Salinas must recognize Clinton’s political needs to side agreements, Clinton must also recognize Salinas’ sensitivities to sovereignty concerns that may arise from the agreements.

As for fears about the impact of free trade on American labor, Ross Perot had it wrong. The “giant sucking sound” is being caused by American job losses to Asia and Europe, not to Mexico. Mexican exports to the United States are less than 5% of our total imports. Clinton’s response to fears of job loss should be to provide generous resources to retrain workers and improve our competitiveness. If he does this, as he has promised, he will have established a considerable measure of security for the future of the American work force. Such an initiative will need to be fleshed out and presented to Congress before a final vote on NAFTA.

As for the environment, the problems of air pollution, water contamination and necessary infrastructure along the border need to be addressed now. A U.S.-Mexico binational environmental commission could pave the way for a breakthrough on environmental protection. Such a commission would need the power to coordinate compliance with environmental laws and to guarantee bonds for infrastructure projects. U.S. and Mexican taxpayers should not have to foot the entire bill for environmental cleanup. Multinational corporations with operations in North America and in the border maquiladora zones should take a strong and innovative leadership role to find solutions and contribute financially to resolve these problems. So far, multinationals and maquiladoras have not done their fair share--have even shirked their corporate responsibilities to protect the environment in their communities. A solution along these lines would make NAFTA the “greenest” trade agreement in history.

Clinton and Salinas share striking generational similarities, in that both are pragmatic problem-solvers who have focused their energies on economic growth and development. Their mutual objectives can be met by developing a personal chemistry and by making some tough decisions on NAFTA early on.