President submits NAFTA to Congress after winning concessions from Mexico

November 04, 1993|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau

WASHINGTON -- President Clinton sent legislation creating the world's largest free trade zone to Congress yesterday, after pressuring Mexico into accepting last-minute sweeteners for six U.S. industries, including the powerful sugar industry.

Mickey Kantor, the U.S. trade representative, worked the phones until 4 a.m. yesterday to obtain the Mexican concessions.

They are designed to lessen special-interest hostility to the controversial North American Free Trade Agreement (NAFTA) and help the administration pick up badly needed votes in the House.

In sending the NAFTA legislation to Capitol Hill, Mr. Clinton acknowledged that he did not have the votes yet for approval but said: "We have had real movement in the last 10 days. We are going to win it."

Crucial concessions

The concessions by Mexico were considered crucial to improving the agreement's prospects of approval in the House, which is scheduled to vote Nov. 17.

NAFTA would combine the United States, Canada and Mexico into a free trade area of 360 million consumers as tariffs are bTC gradually eliminated on all products over a 15-year period.

The so-called "sugar fix" could influence the votes of as many as 12 legislators from states with sugar beet or cane production.

The original agreement allowed Mexico to export "surplus" sugar to the United States after six years.

But U.S. growers feared that the Mexicans might create a huge artificial "surplus" by switching from the use of sugar to high fructose corn syrup in the manufacture of their soft drinks.

For months, the Mexicans resisted U.S. attempts to close the loophole but finally agreed early yesterday to include corn syrup in their net sugar production calculations, preventing creation of an exportable surplus through syrup-for-sugar usage.

"There was a latent ambiguity," said Mr. Kantor. "We have taken care of that."

Two other agriculture concerns -- citrus fruits and winter vegetables -- were offered new price-based protections to prevent Mexico from selling produce at prices well below U.S. market levels.

Glass, appliances, wine

For three others -- flat glass, small appliances and wine -- Mexico has agreed to special tariff negotiations that would begin the day the agreement is implemented.

Rufus Yerxa, deputy U.S. trade representative, said: "It does deal with the problem of price sensitivity of these products and provides a certain comfort level [for the industries], while at the same time achieving longer-term trade liberalization."

Mr. Kantor played down the notion that the concessions were wrung out of Mexico to gain political support in the House.

"Before there was any thought of votes, we made it quite clear on citrus, on sugar, on vegetables, flat glass, appliances and wine, there were weaknesses that needed to be resolved. And we have done so," he said.

On Capitol Hill, legislators who pressed for the concessions waited for the details.

Rep. Tom Lewis, R-Fla., who led the House campaign for protection for the sugar, fruit and vegetable growers in his home state, advised members of the Florida delegation to "sit tight" until they had studied the legislative language.

'Natural trade advantage'

Signing the letter submitting the NAFTA legislation to Congress, Mr. Clinton said: "If we turn away from NAFTA, we risk losing the natural trade advantage that should come to the United States as Mexico and the rest of Latin America build market economies and stronger democracies.

"If we embrace NAFTA, it is one strong step to take this country into the 21st century with a revitalized economy."

Both Republican and Democratic members of Congress were in the Oval Office for the ceremony, reflecting the necessity of putting together a bipartisan majority for an agreement that is opposed by most House Democrats and organized labor.

The legislation submitted yesterday was accompanied by an environmental impact statement and a $90 million, 18-month plan to help retrain workers who lose their jobs because of the agreement. A full worker security program will be submitted by the administration next year.

The administration undertook to submit a full report to Congress by July 1, 1997, on the effects of NAFTA on the environment, employment, exports, investment, and the link between Mexican productivity and wages, a crucial element in measuring the economic disparity between the manufacturing industries on each side of the border.

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