Fog or long vision? NAFTA under attack: Clinton-Zedillo meeting should promote free trade.

October 10, 1995

MEXICO'S PRESIDENT Ernesto Zedillo, who is to meet President Clinton today to confirm their common interest in upholding the North American Free Trade Agreement, believes one has to distinguish between "fog" and "long vision" in assessing the U.S.-Mexican relationship.

With Pat Buchanan, Dick Gephardt, Ross Perot and organized labor singing from the same hymnal, NAFTA is under attack. Its vulnerability lies not in the terms of the treaty, a good deal for both countries; rather, it lies in the short-term collapse of the Mexican economy last December that has curtailed Mexico's ability to buy U.S. goods and services.

For American protectionists, last December's run on the peso offers an irresistible opportunity for the release of vast quantities of "fog." Mr. Perot is mouthing his favorite sound bite about a "giant sucking sound" of U.S. jobs flowing south of the Rio Grande. Mr. Buchanan preaches "economic nationalism" and other forms of of xenophobia. House Minority leader Gephardt pursues his not-so-subtle revolt against the Clinton White House. And organized labor seizes on anecdotal examples of factory jobs going south without acknowledging prospects for positive job creation and cheaper consumer goods under a free-trade regime.

Undoubtedly Mr. Zedillo will emphasize the need for "long vision" during his visit. Just twenty days after he took office ten months vTC ago, this Yale-trained economist was confronted by a full-blown crisis. And from all indications, his handling of the crisis has been sufficiently skillful to be an example for Third World leaders.

He has pushed up Mexican reserves from $6 billion to more than $15 billion. He has started paying off a $12.5 billion U.S. loan. He has stuck to austere monetary policies despite a severe recession, 40 percent unemployment and revolutionary rhetoric largely ignored by the passive Mexican populace.

The Clinton-Zedillo meeting should kick off a concerted counter-attack against the weird protectionist alliance. If Mr. Clinton accomplishes nothing else, his achievements in gaining ratification of NAFTA and a new World Trade Organization will make him a "trade president" for the history books.

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