Clinton Presses for NAFTA, Blasts ‘Fear-Mongering’ : Economy: President says defeat of the free trade pact would increase America’s immigration problems. He also sees weakened job outlook.

Deriding “fear-mongering” and “ridiculous statements” by opponents of the North American Free Trade Agreement, President Clinton on Wednesday stepped up his own rhetoric, warning that “everything people worried about in the 1980s will get worse” if the pact is voted down.

After wandering through a rain-dampened display of products that his Administration says would find new markets in Mexico if the free trade agreement is approved, Clinton said that defeat of the pact would increase the United States’ immigration problems while weakening its job outlook.

To drive home his points, Clinton toured a “trade fair” set up under two tents on the White House South Lawn. On display were a variety of products intended to demonstrate the breadth of U.S.-made goods--and workers--that would benefit if tariffs and other trade barriers were dropped. There were plastic toy building blocks made by Lego, computers from Hewlett-Packard, chocolate mousse pies from Sara Lee and T-bone steaks from North Dakota.

But inside the Capitol at the other end of Pennsylvania Avenue, members of Congress remained the real focus of the fight to gain approval of the pact as the Administration worked with Democrats and Republicans to overcome the latest obstacle: the question of how to make up for the revenue lost from tariffs that the pact would eliminate.

Leon E. Panetta, director of the White House Office of Management and Budget, began a round of meetings with House members, trying to find ways around strenuous objections raised by a group of Republicans and by the travel and transportation industry to a White House plan that would increase fees on travelers entering the United States by air or sea from Mexico, and on some cargo.

But participants in the talks said that no decisions had been made. “They haven’t got it even close to straight,” one congressional source said.

On another front, the Senate Finance Committee, tackling one of the more sensitive elements in the legislation, gave tentative approval to a five-year job retraining program for people who might be thrown out of work by the pact.

The Administration has proposed an 18-month program that eventually would be merged into a wider plan not linked to the agreement. The limited program would cost $90 million and provide training for 10,000 to 15,000 people.

Critics have said that the trade agreement could eliminate hundreds of thousands of jobs in the United States if employers move factories to Mexico. The Congressional Budget Office has said that as many as 200,000 people could lose work over 10 years, but the Administration has said that the losses will be more than offset by new jobs created by the increase in commerce with Mexico.

At the White House, the display of goods and Clinton’s sharply worded remarks were part of an effort to make the President’s support for the agreement move visible.

The President said that he had tried to avoid discussing “the bad things” that would occur if the trade agreement is voted down because “I don’t want us to adopt this out of fear.”

Then he asked:

“What would we do in America if we turn away from this and (Mexican leaders) make this sort of arrangement with Japan or with Europe. And they make the investments there and then we have to deal with their products coming through the back door from Mexico? What will happen to our job base? I’m telling you, everything people worried about in the 1980s will get worse if this thing is voted down and will get better if it’s voted up.

“If you beat this, will it reduce the pressure for people looking for illegal immigration? No,” Clinton said. “It will increase the pressure on people coming here. So if you want to have the immigration problem eased, you must vote for NAFTA, not against it.”

The stepped-up White House campaign set off a flurry of faxes, with critics saying that Mexican salaries do not provide enough money to buy the consumer goods on display, even if they can enter the Mexican market tariff-free.

“Holding a yard sale won’t convince the public,” said Craig Merrilees, director of the California Fair Trade Campaign, an organization that opposes the agreement.

At the Washington headquarters of the AFL-CIO, a center of opposition to the pact, there was another display: dresses and telephones and other electronic products were presented as the sorts of items that would be made in Mexico if the agreement is approved.

And Rep. Bernard Sanders of Vermont, the only Independent in the House, came up with a plan to balance the wage differential between legislators in the United States and Mexico: Bring House members’ annual salary of $133,644 down to the $35,410 paid to members of the Mexican Congress.

Explaining NAFTA

Key facts about the North American Free Trade Agreement that would link the United States, Mexico and Canada economically:

* What it does: Tariffs and other barriers to the movement of goods, services and investment among the three countries would be eliminated, creating the world’s largest and richest trading bloc, covering 360 million people.

* Timing: The pact is scheduled to take effect Jan. 1, 1994, assuming it has won congressional approval by that time.

* Tariffs: All tariffs would be eliminated over a 15-year period, with industries that suffer the most from import competition given the longest time to adjust. Levies on half of the more than 9,000 products coming in duty-free would be phased out immediately, with that figure rising to 65% within five years. Currently, U.S. tariffs on Mexican products average less than 4%, while Mexican tariffs on American products average 10%.

BREAKDOWN BY INDUSTRY

* Agriculture: Tariffs on all farm products would be phased out, but producers would be given 15 years to adjust to a duty-free status on sensitive products. These include corn and dry beans for Mexico and orange juice concentrate, melons, sugar and asparagus for U.S. farmers. Mexican import licenses, which cover about 25% of U.S. exports, would be dropped immediately.

* Autos: To qualify for duty-free treatment, the North American content of cars, now set at 50%, would have to reach 62.5% after eight years. This would prevent a country such as Japan from shipping parts to Mexico for assembly into cars destined for the United States.

* Financial services: Mexico would allow U.S. and Canadian banks, brokerage firms and insurance companies free access after a six-year transition period in which current bans on foreign ownership would be phased out.

* Telecommunications: U.S. companies would be allowed to compete for contracts from Mexico’s public telephone system, and investment restrictions would be eliminated by July, 1995.

* Textiles: Mexico would be able to escape high duties on shipments to the United States and Canada if the clothing is made from yarns and fabrics that come from North America.

* Trucking: Mexico would allow foreigners to invest in its trucking firms and U.S., Mexican and Canadian trucking companies will be allowed to do business on cross-border routes that are now prohibited.

* Side agreements: Establishes trinational commissions to oversee environmental and labor laws with the possibility of sanctions--either punitive trade tariffs in the case of the United States or Mexico or fines in the case of Canada--for failure of a country to enforce its own laws.

Source: Times wire reports