Perot Puts Spotlight On Free-Trade Issue

ROSS PEROT, loudly championing the cause of American factory workers, threatens to turn "free trade" into one of the hot-button issues of the 1992 campaign.

Citing potential loss of jobs, Mr. Perot charges that President Bush's free-trade proposals will drive down living standards in the United States. He also warns that the loss of factories to other countries will undermine US national security.

The president is racing toward free- trade deals as fast as his negotiators can wrap up new treaties. His top priority is a North American Free Trade Agreement [NAFTA] with Mexico and Canada, which could be signed this summer. NAFTA would open US borders to goods from Mexico, where factory wages hover between 60 cents and $2 an hour.

Already, dozens of major US companies, including Ford and General Electric, have moved some manufacturing operations to Mexico to take advantage of low-cost labor.

Mr. Bush's trade policies also include efforts to expand foreign markets for US goods. Toward that end, he met this week with Japan's prime minister, Kiichi Miyazawa. (Bush seeks breakthrough in world trade talks before G-7 summit, Page 8.)

Perot charges that US government officials too often knuckle under to Japan on trade issues. His outspoken attacks pose a problem not only for Bush, but also for Democrat Bill Clinton. The Arkansas governor, like Bush, considers himself a free-trader.

Many Americans in both parties are troubled by the deindustrialization of the US as this country loses manufacturing capability in computers, electronics, textiles, and other industries.

While the manufacturing bases of Japan and Germany are growing, the US industrial base has eroded since the mid-1970s, when about 22 percent of all Americans worked in the manufacturing sector. Today that has slumped to about 18 percent, with a further decline to 12 percent expected early in the next century.

This trend could hurt Bush among Republicans who support "America first" policies. Those voters showed their potential strength this spring when they backed insurgent Republican Patrick Buchanan against Bush in the presidential primaries.

Clinton is also vulnerable. Major unions are officially on his side. But Perot's blunt talk about protecting high-wage American jobs could galvanize millions of unionized workers who see the trade issue as their No. 1 priority.

The trade debate has strong populist overtones. It pits working-class Americans, who see their jobs going south, against sinecured bureaucrats, tenured academics, and well-heeled businessmen who say free trade is good for America.

For example, earlier this year the Institute for International Economics released a 369-page study that claimed that a free- trade treaty with Mexico would create, on balance, 130,000 new US jobs plus 600,000 new jobs in Mexico.

The study, written by Gary Clyde Hufbauer and Jeffrey Schott, conceded that 112,000 US workers could be displaced by the treaty over the next 10 years, but said the number of new jobs would far outweigh that loss.

But Perot sees the treaty as a way for companies to exploit cheap Mexican labor while simultaneously getting unrestricted access to the American market. He insists that manufacturing capability, and US workers, would be the losers. He says: "If you are running a factory in the United States at United States labor rates, and your identical twin can build a factory in Mexico and pay people a dollar an hour; hire a young, 25-year-old work force that's very healthy, very productive; have no mature workers; h ave nobody being eligible for retirement for 20 or 25 years; have little or no health care,...little or no pollution or environmental controls, ...there is no way [for the US] to compete."

Perot derides economists who say, "No problem. The US can just send its low-wage factories south while keeping the high-wage factories at home."

Electronics plants, truck factories, and auto factories, are already heading south. One of the most modern auto plants in the world is in Hermosillo, Mexico. These facilities represent the cream of American industry. Perot says: "Keep in mind, if we had not had the Willow Run plant at General Motors in World War II, we could not have converted it to a bomber plant. If we don't have the ability to make things in this country, we can't defend ourselves. End of story." @BODYTEXT =

USH will obviously support a treaty crafted by his own negotiators. But Clinton's advisers emphasize that, while supporting free trade, the governor takes a wait-and-see attitude toward this particular treaty.

Robert Shapiro, vice president of the Progressive Policy Institute and a top economics adviser to Clinton, calls the Mexican trade issue "complex." Simple, Perot-style answers rejecting freer trade won't suffice, he says: "Clinton understands what we need to do - develop the skills to produce high-quality, high-value goods that others can't produce" while "expanding foreign trade."

Mark Anderson, an AFL-CIO trade specialist, also emphasizes the complexity of the trade issue. Even without a new treaty, US plants are moving south, he observes, and American workers already are losing jobs, especially in industries like auto parts.