Next Step : Pride, Politics and the Peso : New Aid Hits a Sensitive Nationalist Nerve in Many Mexicans

“Whether we like it or not, Mexico, like nearly every country in the world, belongs to an economic organization linked to blocs, accords, treaties and associations,” ruling party Deputy Oscar Guillermo Levin Coppel calmly explained in a dose of bitter reality last week, attempting to cut through a tidal wave of cynicism, anger and seething resignation on the floor of Mexico’s Chamber of Deputies.

“We have heard here in this house the same serious arguments of ill intentions that we have heard for years. We have spoken of mortgaging our oil. We have said that we’re going to surrender our sovereignty to New York tribunals. . . . With all seriousness, companeros, there does not exist at this moment another alternative.”

The subject of the most bitter debate since Mexico’s newly autonomous Congress convened in December was the $20-billion U.S. credit package that has rammed home almost overnight a new era of interdependence between Mexico and its huge neighbor to the north. Most Mexicans in the streets, and many in the halls of power, find it as hard to accept as most Americans do.

“For many years, the Mexican economy resisted the world tendencies heaped on the wagon of history. But, for the past 10 years, it has insisted on becoming a part of the global economy,” Levin continued in a candid speech during a rancorous, hours-long debate, the flip side of the U.S. congressional controversy over President Clinton’s $20-billion contribution toward a $50-billion bailout for Mexico.

“In these moments, fellow deputies,” Levin warned, “an abrupt turn in economic policy would have devastating affects on our economy. A change of direction would destroy with a single slash at least 50% of our national productivity, which is tied to globalization.”

In the end, President Ernesto Zedillo and his ruling Institutional Revolutionary Party, or PRI--a fierce nationalist force that seized and nationalized every foreign oil company operating here 57 years ago--prevailed through its sheer majority in a vote that locked Mexico into one of the most restrictive and tightly monitored loans in the history of bilateral credit.

But, in the process, the loan package ripped at the most sensitive nationalist nerve in the Mexican psyche: its relationship with its often-overbearing neighbor to the north.

The $20-billion debate over a loan that uses Mexico’s oil-export revenues as collateral and requires that they be deposited in an account of the New York Federal Reserve Bank was hardly confined to the halls of power. For here, at the deepest grass-roots of Mexico, oil is the symbol of independence and nationalist defiance.

“This is very dangerous for us. The oil is the patrimony of everyone,” said Berta Dabila in her small jewelry shop not far from the congressional hall where the debate was unfolding last week. “It’s for us and our future generations. And now, it’s the only thing we have left.”

“So what are we left with now?” echoed Lucilla Diaz Sanchez, a 53-year-old customs official. “They have everything in America; we have almost nothing. And now they’re taking our oil.”

“And what happens when the oil is gone?” wondered a 19-year-old typewriter repairman who identified himself only as Alejandro.

“Then where will we be? We could be poor like the poorest nations of Africa. But, of course, it’s logical the U.S. would ask for the most valuable thing we have. If we offered them fruits or vegetables for $20 billion, they wouldn’t accept it.”

Talk like that, as Deputy Levin made clear, has been the basis of the Mexican government’s effort to sell the loan package from the start, to separate it from the issue of sovereignty--and especially from the government’s relationship with the United States.

It has been a hard sell, to say the least. It came against the backdrop of Proposition 187, the California initiative on undocumented migrants that injured the pride of the Mexican nation, and statements from Secretary of State Warren Christopher that Mexico had also agreed to Clinton Administration demands that it crack down on narcotics traffickers on the Mexican side of the border.

“There are two truly unacceptable points. One, that the American government says our undocumented migrants are criminals,” Deputy Cuauhtemoc Sandoval Ramirez of the left-leaning Democratic Revolutionary Party argued during the debate. “How is it possible that we accept this? And second, it seems to me that this economic package includes other conditions that cut gravely into the development of our democracy and the sovereignty of this country.”

Added his party colleague Everardo Martinez Sanchez: “This contract seems a contract of surrender, in which the conqueror imposes all the conditions on the conquered. You do not find in the contract a single clause, a single agreement, that is in favor of or benefits Mexico.”

In such rhetoric, the opposition legislators flagged what is likely to become a platform for escalating attacks on Zedillo and his centrist government from both the political left and right.

The opposition ideologues believe that the president is vulnerable on the issue of Mexico’s relations with the United States. His policy point man, Foreign Secretary Jose Angel Gurria, was the linchpin of Mexico’s debt-restructuring negotiations with Washington in the 1980s and appears far more comfortable in the company of American bankers than in Third World capitals.

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With the ruling party already in disarray as it approaches key state elections in Guanajuato and Yucatan in May, analysts say the opposition could well find wide populist support by using the $20-billion loan as the cornerstone of a campaign asserting a pro-U.S. bias in the PRI ranks.

Cognizant of the risk, the PRI’s more articulate members have sought to separate the loan from the broader policy issue.

Deputy Levin tried to globalize it. Deputy Gabino Fernandez Serna attempted to finalize it--and with a stark bottom line.

“You are saying that we are compromising and surrendering sovereignty,” Fernandez Serna declared to his opposition colleagues.

“We are in the middle of an act, fellow deputies, an act in which 500 Mexicans--none of us messengers of any other nationality--are deciding something very important: to put this country back on its feet!

“For that reason alone, this financial package does not represent any attack on our sovereignty. It represents our survival.”