Free Trade Talks Focus on U.S.-Mexico Differences

April 07, 1991|By JOHN M. McCLINTOCK

MEXICO CITY — Mexico City.--It was a most un-Japanese thing to do.

The Japanese legislator was a guest of the Mexican Senate last summer. His hosts were asking him the usual softball questions about Mexico as a good place to invest.

Surely, he would respond with praise.

But, alas, Kei Inoue would not be restrained.

Mexico, he said, was corrupt and anti-democratic. No sensible Japanese businessman would invest a single yen unless Mexico cleaned up its act.

Today the United States and Canada are poised to begin negotiations with Mexico on a historic trade agreement, as President Bush meets in Houston with Mexico's President Carlos Salinas de Gortari.

If all goes as planned, Mexico will join the U.S. and Canada in creating the world's largest trading bloc, with a population in excess of 360 million people.

Yet, as the Japanese legislator observed, Mexico is still scarred by its protectionist past, its corruption, its poverty and one-party rule.

In seeking international support, it has also opened itself to outside opinions shaped by the new world agenda of human rights, respect for the environment and democratic principles.

The U.S. Congress is now showing mounting unease that a commercial pact with Third-World Mexico can be treated in the same way as the two-year-old free trade agreement with Canada, whose economy and culture is analogous to its neighbor's.

Within the past year, Mexico has received painful criticisms from Americas Watch (for police torture, rapes and killings), from the Organization of American States (for its undemocratic elections) and from the American Medical Association (for border pollution).

To be sure, Mexico has its own list of complaints against its big northern brother. These range from the dumping of hazardous waste, including radiocative materials, to the murder of illegal migrants.

Yet the issue is not so much who did what to whom, but whether the disparities between Mexico and the two developed countries can be dealt with in a narrow trade agreement.

Above all else, Mexico is a country of poor people whose minimum daily wage is barely $3.70 and whose protectionist policies have left the economy undercapitalized and technologically backward.

It is a nation where the cops rent their bullets and where government fixers need to be bribed to get things done.

It is also a nation where per capita income is about $2,000 (versus more than $16,000 in the U.S.), where the work week is still 48 hours and where some Mexican economists estimate that 40 percent of the population is living in poverty.

At the same time, it is a country of a powerful, fabulously wealthy elite, the very people are who are the prime movers and potential beneficiaries of a free trade agreement.

Thirty-seven Mexican industrialists are the principals in 70 companies that accounted for an estimated 22 percent of the gross national product in 1989, according to a recent study by La Jornada, the Mexico City daily.

Between 1983 and 1990, during a period when Mexican workers lost more than 50 percent of their buying power, many of those companies had yields in excess of 9,000 percent after discounting inflation, the Jornada study showed.

The Bush administrations believes a free trade agreement will address Washington's fundamental strategic interest: The continuance of a politically stable southern neighbor of 81 million people, whose economy is already inextricably bound to the U.S.

By improving Mexico's economy, both nations hope to stanch the flow of illegal immigrants seeking jobs in the U.S. (More than a million are stopped at the border each year, but many thousands more get through.)

Also, supporters say, a trade agreement would provide Mexico with the money to curb its disastrous environmental problems, improve its infrastructure and eventually provide wage equalizaton, possibly within 15 years.

At the same time, critics wonder whether the U.S. can ignore the undemocratic nature of the Mexican political system and whether it has chosen stability at any price, as it has so many times in the past -- leading to bloody setbacks in Nicaragua, Panama, Cuba, Chile, Guatemala, El Salvador, Iran and Vietnam.

There is scant evidence that the "democratic reforms" adopted by the Mexican Congress last year will lead to a truly pluralistic system and end what Peruvian novelist Mario Vargas Llosa calls its "camouflaged dictatorship."

* This spring, the U.S. Congress is expected to decide whether to grant President Bush the "fast track" authority he needs to negotiate the tripartite agreement.

The "fast track" method limits Congress to a final vote on a trade package negotiated by the administration.

Without the authority, an agreement is unlikely, administration officials concede, since it would be subject to congressional amendments and bring painful focus to issues that have long divided the two countries.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.