Mexico puts on brave face over new NAFTA hurdle

July 01, 1993|By Ginger Thompson | Ginger Thompson,Mexico City Bureau

MEXICO CITY -- The Mexican government put on a confident front after yet another U.S. assault on the North American Free Trade Agreement, a treaty that is politically crucial to Mexican President Carlos Salinas de Gortari.

"We do not see this as a setback," said Finance Secretary Jaime Serra Puche, referring to a decision yesterday in U.S. federal court that prohibits the U.S. government from pursuing NAFTA until it completes a formal environmental-impact study.

Despite the calm appearance, news of the court ruling clearly shook most Mexican officials. And in what has become typical with any bad news on the progress of the treaty, the Mexican stock market fell, closing down 30.84 points, or nearly 2 percent.

"Can this treaty survive?," asked one adviser to the Mexican government. "Yes, it can. It may take the life out of all of us, but it can survive."

In the past few months, the treaty has faced several blows from opponents in the U.S. Congress. Those opponents said the treaty -- which would eliminate trade barriers among the United States, Mexico and Canada -- does not provide for the protection of the environment and would force many U.S. workers out of jobs as companies relocate south of the border to take advantage of lower Mexican wages.

Despite economic advances made during the five-year Salinas administration, a postponement of NAFTA, the centerpiece of his reforms, would be a major political defeat. The Mexican government has spent about $25 million in public relations and legal fees to win over opponents.

"But this challenge is significant because it is a judicial challenge," said the adviser to the Mexican government, referring to yesterday's federal court decision. "And courts are immune from lobbying."

All day, Mexican government officials refused to talk about the decision. And then at a hastily called evening news conference, Mr. Serra, the finance secretary, said the Mexican government saw no reason to worry about the decision, characterizing it as "an internal matter of the United States judicial system and the executive branch of the government."

The treaty is scheduled to be implemented Jan. 1, 1994. But because of delays caused mostly by U.S. demands for environmental and labor protections, many are skeptical that the negotiations on the parallel accords will be completed in time.

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