COLUMN ONE : Mad and Glad Over NAFTA : As summit delegates gather to ponder the hemisphere’s economy, they will be looking at the trade accord’s first year. So far, it has sparked controversy, confusion and some surprising opportunities.

If you want to know how sticky free trade can get these days--literally--just ask the guys at Burlington Northern Railroad about the green goop.

The brouhaha erupted earlier this year, when Mexican officials decreed that U.S. corn shipments be dyed green. Trade deal or no, this was business: The dye helps Mexicans track American corn in their restricted market, and the rule stands, despite American complaints.

“In many cases, the corn colored the inside of the rail cars green,” said Rusty Jesser, a spokesman for Burlington Northern, explaining why the railroad will no longer carry the gooey grain.

As heads of state from North and South America gather Friday in Miami to consider closer economic ties, a towering precedent will loom over their summit: the North American Free Trade Agreement, now approaching its first birthday.

By many gauges, free trade has been good medicine for the North American economy and an instructive lesson for the entire hemisphere. Yet a close look at one year’s experience with NAFTA shows how profoundly the world of commerce can vary from the world of political rhetoric and cold statistics.

Neither the burning fears nor extravagant expectations sparked by the pact have been borne out since it took effect Jan. 1. (It will, of course, take years to determine NAFTA’s true effect on jobs, industries and the economies of North America.)

Some rules have led to controversy, red tape and confusion, with the green-corn flap as only one example. Others have opened up surprising opportunities. Tomato farmers in Florida are mad. Sausage exporters in Illinois are glad. And amid the fears of organized labor, union jobs in a Whittier factory have expanded.

The nitty gritty of international trade, in other words, has proved to be a much quirkier process than the idealized image that emerges from global summits.

“Most people thought NAFTA meant ‘Put the stuff in my truck and cross the border,’ ” notes Ross E. Porter, a customs adviser, recalling how one frustrated American merchant finally gave up on shipping low-cost bathing suits into Mexico after a series of delays.

It’s not that easy, he says.

So, as delegates gather in Miami, the NAFTA experience offers some points to keep in mind as they sketch an economic future for the hemisphere:

* NAFTA’s greatest significance is symbolic, its very existence a security blanket for American executives spooked by Mexico’s uncertain business culture. The reductions in import taxes, however sweet, are less important than the reductions in fear.

“If you’re going to pick a country (with vast potential), Mexico is the one,” declares Richard J. Heckmann, chairman of U.S. Filter Corp. in Palm Desert. “But without NAFTA you’re scared to death of it.”

* Free trade isn’t free. Mexican avocado growers, U.S. cherry farmers and Canadian peanut-butter makers are a few of the parties unhappy with restrictions imposed by their next-door neighbors.

* NAFTA’s short-term benefits, while real, may be exaggerated by the economic recovery that is stimulating exports and investment throughout North America.

Certainly, the pact is far-reaching: Tariffs are being phased out over the next 15 years, as the three neighbors try to make their business laws and standards much more harmonious.

Yet the real action is concentrated in Mexico, an economy of breathtaking potential that only now is edging toward the free-market practices of the United States and Canada. The post-NAFTA hassles of doing business in Mexico pale in comparison to the not-so-old days when bureaucratic caprice turned export efforts into a helter-skelter gamble.

To get the flavor, consider the seemingly mundane matter of clothing labels.

U.S. exporters used to wonder, “Did labels have to be attached? Did they have to be sewn on? Did they have to be stuck on? Could you put them side by side with the freight? There were as many different answers as there were ports of entry,” recalls Porter, marketing manager at Porter International in San Diego.

The trade deal should ease the confusion by answering those nettlesome questions: “With NAFTA the red-tape burdens are sometimes a problem--but at least they’re dependable.”

Throughout North America, investors and executives are teaming up in joint ventures, scrambling for product distributors across the border and exhibiting a fresh interest in neighboring countries. Trade among the three nations is galloping at record levels.

“Eleven months ago we had only four people in Mexico,” says Carlos J. Valderrama, director of Latin American operations for the Carlsmith Ball law firm in Los Angeles, which advises clients on both sides of the U.S.-Mexican border. “Now we have 16.”

Doing business in other countries is not always for the faint of heart. Trade provisions can have pull-your-hair-out complexity--and none is more important than the rule that products must be made in North America to qualify for lower tariffs.

Sound simple? At Alesis, a Los Angeles manufacturer of studio electronics equipment, the made-in-North America proviso has triggered a time-consuming research project devoted to figuring out if a digital audio tape recorder with hundreds of components passes NAFTA muster.

“When NAFTA passed I jumped for joy, thinking we wouldn’t have to pay duties in Mexico, and we’d be even more competitive,” recalled Mark Frederick, international sales manager for the company. “When we looked at the paperwork, I was really disappointed.”

In any case, the growing demand by Mexican musicians for Alesis’ ADAT audio tape recorder underscores a larger point about NAFTA: It is a catalyst to an ongoing process. International trade inside North America is burgeoning anyway. “We’ve been growing in Mexico 30% to 35% the last few years--NAFTA or no NAFTA,” Frederick points out.

For others, however, NAFTA is of paramount importance, a reassuring sign that the United States and Mexico have committed themselves to a new relationship. The commitment, rather than the fine print, is what prompted these executives to take a fresh look south of the border.

And the rewards are starting to flow back. “Mexico was last on my list of places to go,” concedes Raymond W. Cohen, a vice president with Diagnostic Monitoring Systems, a maker of medical software in Orange County.

Before NAFTA, that is. This year, the Orange County firm projects that Mexican sales could reach $50,000--up from zero in 1993. “Specifically because of NAFTA, I said, ‘This is a good time for us to do some business in Mexico,’ ” Cohen says.

Not that trade wrangles have vanished into the past. U.S. restrictions on avocados have angered Mexicans, and Mexican restrictions affecting apples, cherries and plums have frustrated Americans. Florida’s tomato growers were infuriated earlier this year by what they considered massive dumping of low-cost tomatoes from Mexico.

And don’t forget the Canadians: They want to ship a lot more wheat, sugar and tobacco to the United States than U.S. officials allow.

But for all that, trade is humming. Even U.S. corn exports to Mexico are up dramatically (almost tenfold) under NAFTA, despite the green-dye rule that aims to keep corn for animal feed separate from corn for consumers--protecting Mexico’s highly subsidized corn industry in the process.

“We continue to look at Mexico as a good customer,” says Richard R. Calhoun, an assistant vice president with Cargill, a giant grain company in Minneapolis.

Meanwhile, one year after organized labor lost a furious fight to stop NAFTA, the employment impact looks modest in a U.S. economy that has 115 million non-farm jobs.

The Labor Department has approved special benefits for only 13,496 casualties of the trade accord so far. Requests have been received from 286 companies in 40 states, including 17 firms in California.

While the Clinton Administration claims a gain of 100,000 jobs, the Joint Economic Committee of Congress estimated a net loss of 10,000, and some insist that the jobs deficit is much higher.

The harshest criticism goes beyond numbers, however. NAFTA, its opponents maintain, has given employers a potent new lever to use on workers and politicians, in effect letting them say: Don’t make waves or we’ll shift production to Mexico. While no massive shifts have occurred so far, the game is in its early stages.

“What the serious critics of NAFTA said was that this would be part of a general downward trend in labor standards and environmental conditions,” said Dean Baker, an economist at the liberal Economic Policy Institute in Washington. “And everything we’ve seen bears this out.”

Most experts are more enthusiastic. Free trade, goes the mainstream thinking, is bringing North Americans a greater choice of goods and services, making the entire continent more productive and providing a downward pressure on prices.

“In any trade agreement some people will lose their jobs and some people will gain jobs,” said Kurt E. Karl, an economist with the WEFA Group near Philadelphia. “The big news is that prices go down and consumers are the winners.”

Well-paid union workers should be at the top of the losers’ list, according to common wisdom. Yet in another of NAFTA’s anomalies the real world of business offers various examples to the contrary.

At U.S. Filter, a major manufacturer of water-treatment systems, 1994 has been a banner year for Mexican business: a sewage treatment system for the city of Cuernavaca (in which the California company is investing $20 million) and water systems at a new Chrysler plant and the Coca-Cola bottling plant in Mexico City.

And all that work has prompted a flurry of hiring north of the border.

“The engineering is done in Pittsburgh. The construction is done in Whittier and Rockford (Ill.) And the installation is in Mexico,” explains Heckmann, company chairman.

The Whittier plant, for instance, has added about 30 employees this year, largely because of the demand from Mexico. They are mostly welders and assembly workers who belong to the International Brotherhood of Boilermakers and are paid on average $13 an hour plus benefits.

The Mexicans “need our help, and we need their business,” said Heckmann, a fervent NAFTA supporter who travels to Mexico once a month. “To me it’s the perfect combination.”

Many companies, meanwhile, prefer to furnish Mexican customers with products made in the United States.

Amir A. Moghadam, owner of a lingerie factory, looks forward to rising sales in Mexico for his Parisa label. But he believes it pays off to keep the sewing machines right outside his office in Van Nuys where he can walk to the floor in seconds if a problem emerges.

“Everyone’s telling me to go there and open up a factory, but I have no intention,” said Moghadam, president of AFT Apparel International.

As some see it, post-NAFTA ferment is leading inevitably to even more ferment, as the process of trade liberalization settles over increasingly large regions of the Western Hemisphere and the whole world.

The forecast is for new headaches, new opportunities and an increasingly integrated global economy, dramatized by the Summit of the Americas.

“It’s not a new status quo,” declares Van R. Whiting Jr., a senior fellow at UC San Diego’s Center for U.S.-Mexican Studies. Rather, he continued, NAFTA has sparked “a continuing process of new problems and solutions.”

Keith Heard, executive vice president of the National Corn Growers Assn.--which continues to protest the green-dye requirement--puts it simply: “The only people that you don’t have trade problems with are the folks that you don’t trade with.”

BACKGROUND

The North American Free Trade Agreement, which took effect Jan. 1, phases out over the next 15 years tariffs and other barriers to the movement of goods, services and investment among the United States, Mexico and Canada. The pact creates the world’s largest trading bloc, covering more than 360 million people.