Clinton Offers NAFTA Enticement for Wary Lawmakers

The Clinton Administration Wednesday unveiled its latest ploy to win the support of lawmakers wary of voting for the North American Free Trade Agreement: a $2-billion to $3-billion development bank that would lend money to clean up the U.S.-Mexican border and retrain affected workers.

The proposal is designed to win over a number of critical House votes and it produced the desired result from one key lawmaker, Rep. Esteban E. Torres (D-La Puente).

The support of Torres--whose close ties to the United Auto Workers union, which opposes the accord, were born during his years on an auto assembly line--raised the hopes of the trade pact’s backers that he will bring with him several other House members.

The Administration campaign for the agreement suffered a setback, however, from Prime Minister-elect Jean Chretien of Canada, who strongly reiterated his campaign call for opening up the agreement to negotiate greater protection for Canadian workers.

The new lending institution, the North American Development Bank, would require congressional approval before it can begin operations. Legislation establishing the bank would be included in the bill implementing NAFTA. The House is scheduled to vote on the implementing legislation Nov. 17.

The United States and Mexico would contribute $225 million each to the bank, over four years and the bank would turn to international capital markets to provide as much as $3 billion in loans and guarantees.

Torres agreed to vote for the trade pact after the Administration said that it would make about $200 million available to community projects and for investment in areas distant from the border. The target would be to ease the adjustment for industries and workers hurt by competition from Mexico that is fueled by the trade pact’s provisions.

Under original plans for the bank, the funds would have been dedicated specifically for environmental projects along the border.

Torres told reporters at a news conference at the Treasury Department that as many as 10 or 12 colleagues who had been wavering on whether to vote for the agreement may now commit to supporting it.

In his first news conference since his Liberal Party won Canadian parliamentary elections Monday, Chretien said in Ottawa that he would seek improved rules within the agreement covering subsidies and “dumping”--selling exported products at unfairly low prices to weaken companies in other countries.

Chretien also said that he would seek greater protection for the Canadian energy industry.

While the previous Canadian Parliament approved the agreement, it cannot be implemented in Canada until a formal proclamation is issued by the government.

“We still have that option,” Chretien said, holding out the clear possibility that he would refuse to take the final step until the new conditions are met.

Clinton Administration officials sought to play down that threat.

“We’re not contemplating reopening NAFTA,” said Jeffrey R. Shafer, assistant secretary of the Treasury for international affairs.

Nevertheless, the new round of complaints coming from Canada have complicated the Administration’s campaign on behalf of the agreement, which would eliminate tariffs and other obstacles to free trade among the United States, Mexico and Canada over 15 years.

If approved by the House and Senate--and proclaimed by Canada--it would go into effect Jan. 1, 1994. Support by the Mexican government is not in doubt.