COVER

THE TRADE DEAL FACES DISSECTION

JOHN DALY November 16 1992
COVER

THE TRADE DEAL FACES DISSECTION

JOHN DALY November 16 1992

THE TRADE DEAL FACES DISSECTION

Bill Clinton bristled during the U.S. presidential election campaign each time President George Bush accused him of waffling, of staking out ground on both sides of an issue. In the case of the proposed North American Free Trade Agreement (NAFTA) between the United States, Canada and Mexico, however, that charge was undeniably true. After touring through beleaguered midwestem industrial towns for months and railing against the exodus of U.S. manufacturing jobs to Mexico and other foreign countries, Clinton finally endorsed the pact in a speech to university students in North Carolina on Oct. 4. But he added that he would not sign it until supplementary agreements dealing with environmental and labor standards in Mexico were concluded.

As president, Clinton will have to give a firm Yes or No to the accord. But last week, while he and his advisers gathered behind closed doors in Little Rock, Ark., to draw up a blueprint for the next four years, both supporters and opponents of NAFTA said that they were still uncertain of exactly what Clinton will do.

Canadian trade officials expressed confidence that Clinton will sign the agreement

and shepherd it through the U.S. Congress intact. International Trade Minister Michael Wilson said that Clinton’s concerns about labor standards and the environment can be dealt with outside the NAFTA agreement. Added Wilson: “We are already in the course of negotiating some of these with the outgoing administration.”

But NAFTA opponents in the United States say that they still hold out hope that Clinton will delay or reopen the pact. William Cunningham, a lobbyist in Washington for the American Federation of Labor-Congress of Industrial Organizations, the U.S. umbrella labor organization, said that Clinton should not try to push the agreement through Congress during his critical first 100 days in office. “A large proportion of the population and the Congress perceive this thing as a job loser,” said Cunningham. He added: “A new president traditionally has a honeymoon. This could be the first spat leading to a divorce.”

Most trade analysts, however, say that Clinton has little room to make changes to the deal. The 2,000-page agreement itself establishes no new minimum environmental or labor standards; it stipulates only that the countries may not lower existing standards to attract investment. But Peter Morid, for one, a professor of economics at the University of Maine, said that the Mexicans will not allow the other two countries to establish and enforce higher standards there. He added that if Clinton wants to pass adjustment programs for U.S. workers who lose their jobs because of free trade, that is purely a domestic issue.

Still, the final decision on whether to press for changes in NAFTA is Clinton’s. And only when he makes his position clear will proponents and opponents of the deal stop second-guessing him.

JOHN DALY