If NAFTA fails, Salinas would be biggest loser

MEXICO CITY — MEXICO CITY -- The leaders of the United States, Mexico and Canada all have declared that the North American Free Trade Agreement is an enormous opportunity not to be lost. And they've all staked their political credibility to win adoption of the accord.

But the man with the most at stake is Mexican President Carlos Salinas de Gortari.


If NAFTA fails to win congressional approval, Mr. Salinas would ,, be dealt a serious political blow. Some political scientists even suggest his political party would strip him of a key political prerogative of a Mexican president -- the right to pick his successor.

NAFTA is the brainchild of the Harvard-trained economist. It is the centerpiece of his sweeping economic reforms that have included massive privatization of government industries, relaxation of rules for foreign investment and strict spending controls that have brought inflation down from 51 percent in 1988 to about 9 percent this year.


Traveling throughout Mexico and abroad, Mr. Salinas has stressed that NAFTA is the most effective way to propel his country into the first world and ensure that his economic reforms are irreversible.

Largest trading bloc

The agreement would eliminate almost all tariffs on goods shipped between Canada, the United States and Mexico, creating the world's largest trading bloc with about 360 million consumers.

However, it faces a daunting fight in the U.S. Congress where opposition seems to strengthen each day.

Led by House Majority Leader Richard A. Gephardt, D-Mo., congressional opponents argue that NAFTA will send hundreds of thousands of U.S. jobs to Mexico, where wages are lower and enforcement of labor and environmental laws is lax.

Independent presidential candidate Ross Perot has thrown his considerable political weight into the fight against the treaty.

As opposition in the United States intensified, Mr. Salinas and his supporters refused to discuss the possibility that the agreement could be defeated in the U.S. Congress.

In the past few weeks, however, the Mexican government's optimism has clearly grown thin.


Almost every day, headlines on the front pages of national newspapers describe the assaults on NAFTA in the United States. And more and more people are demanding to know if Mr. Salinas has thought out a contingency plan in the event that the trade agreement is defeated.

Prestige on line

"His prestige is on the line," says Adolfo Aguilar Zinser, a political analyst whose columns appear in two Mexican daily newspapers. "If [Mr. Salinas] gets NAFTA, people will say that he has the respect of the United States, so we should follow him because he is strong. If NAFTA fails, people will say that he was turned down by the Americans and he is weak."

Others say that Mr. Salinas has appeared weak throughout the NAFTA negotiations. Over skeptical complaints by Mexican businessmen, Mr. Salinas acquiesced to President Clinton's demands that side accords be negotiated to secure the protection of the environment and adherence to labor laws.

Mr. Salinas' pro-NAFTA forces have spent more than $25 million in one of the most expensive lobbying campaigns ever launched a foreign government in the United States. Until 1989, most of Mexico's spending in Washington went to promote tourism.

Moreover, the Mexican government has bent over backward to meet the concerns of Washington.


For example, in July when hundreds of United States-bound Chinese immigrants were becalmed off the coast of Mexico, the Mexican coast guard intercepted them, brought the immigrants to Mexico and immediately deported them.

Days before, Mexican officials insisted that they would not intercept the disabled ships, saying they were an "American problem." They changed their position after negotiations with U.S. officials.

And in August, Mexico had rescued a group of Cuban refugees floating off the coast of Yucatan and immediately deported them. After strong protests by the powerful Cuban exile community in Miami, Mexico risked its long-standing ties to Cuba and asked Cuban officials to turn over the refugees to the Mexican embassy.

The refugees were returned to Mexico, turned over to U.S. officials here and then flown to Miami.

Government officials say that Mr. Salinas has not minimized disputes with the United States, but has only made concessions that are common when negotiating an agreement. And they point out that Mr. Salinas held firm against U.S. demands that Mexico's oil industry be privatized.

U.S. blockade condemned


Moreover, earlier this month, the Mexican government strongly condemned an American blockade at El Paso aimed at halting illegal immigration.

Foreign Minister Fernando Solana complained that the U.S. operation has "created unnecessary tensions that affect the traditionally good relationship of the communities on both sides of the border."

But as more and more obstacles are put up to block passage of NAFTA by the U.S. Congress, people in Mexico are less concerned about what has been given up over the last few years, and more concerned about what will happen if Congress rejects NAFTA.

Businessmen want to know how Mr. Salinas will ensure that foreign investments remain in the country if NAFTA's failure causes panic. Worker groups want to know how Mr. Salinas will spur the creation of jobs or maintain the value of the peso.

But perhaps of more immediate concern is the effect NAFTA's failure would have on the ruling Institutional Revolutionary Party (PRI).

The leaders of the party might be less inclined allow Mr. Salinas to exercise the traditional right of Mexican presidents to select his successor when his term expires in December 1994.


HTC "The PRI may say to Salinas, 'We followed you and you lost, so what right do you have to impose someone upon us?' " says Denise Dresser, a political scientist at the Autonomous Technological Institute of Mexico.

However, says Ms. Dresser, President Salinas is like a "Latin American Machiavelli."

"He's a man with many faces, with many incarnations, with many cards up his sleeve," she says.

May turn to Europe, Asia

Recently, Mr. Salinas has begun to show that he may indeed have trumps in his hand. On a trip through Europe over the past two weeks, he stressed the importance of European markets to Mexico.

And in a speech in Stockholm, Sweden, he said that he would not introduce a new foreign investment law until the Mexican Congress acted on NAFTA.


There is widespread speculation that Mr. Salinas is really waiting for action by the U.S. Congress and that if NAFTA falls, he will propose a foreign investment law that will make the Mexican market more inviting to European and Asian investors.