UNTIL recently, Mexican President Carlos Salinas has practiced a peculiar brand of reform - boldly liberalizing his economy, yet forcefully retaining one-party rule. While relinquishing state control of banking, airlines, and telecommunications, he has tightened his government's lock on labor and the electoral system. While opening Mexico to free trade with its neighbors, he has rejected their recommendations (through the Organization of American States, OAS) that his government create impartial electoral authorities and means of contesting electoral fraud. And even as he has offered new entrepreneurial freedoms, police abuse of civil liberties has become so systematic that Amnesty International describes Mexico as "a human-rights emergency." As the US and Mexico prepare to negotiate a free-trade agreement, Congress has become increasingly concerned about the disparity between economic and political reform in Mexico. Government control of Mexican labor unions is seen as contributing to low wages that undercut US wages. Electoral fraud is seen as limiting the ability of Mexicans to secure their rights - thus tempting US industries to search out Mexico's lax environmental and occupational health and safety standards. So strong are concerns that the White House had to agree to include labor rights and environmental standards in the negotiations in exchange for "fast track" authorization. There are some signs that Mexico City may be listening. In May, President Salinas replaced Attorney General Enrique Alvarez del Castillo, cited by Mexican and international human rights groups for condoning kidnapping, torture, murder, and drug trafficking by federal police. Then in June, Salinas helped ensure a competitive election in Guanajuato, an important state in Mexico's heartland. Neither move was free of ambiguity. Alvarez was removed from the Ministry of Justice the old-fashioned way. With effusive praise, Salinas appointed the former attorney general to head the Federal Public Works Bank, a curious reward for a man accused of corruption. The heavy hand of arbitrary authority was also evident in Guanajuato, where Salinas acted to restore the gubernatorial candidacy of Porfirio Munoz Ledo after the state electoral commission had ruled out the opposition leader. The decision, nominally made by the state's electoral appeals tribunal, followed an 11th-hour directive from Mexico City. Though praiseworthy in effect, the manner in which the decision was reached underscores the subordination of Mexican electoral authorities to the presidency, har dly a reassuring prospect to the opposition as it prepares for the Aug. 18 national midterm elections. NESTLED among the traditional authoritarian forms, however, could be the first fledgling signs of a political opening since Salinas recognized the election of Ernesto Ruffo (of the opposition National Action Party) as governor of Baja California Norte in 1989. The new attorney general, Ignacio Morales Lechuga, took office with a pledge to root out human rights abuses by the police. A couple of weeks later, Salinas cautioned government officials to respect the recommendations of the National Human Rights Commission. The assassination of Victor Oropeza, a leader in the movement for electoral reform in the state of Chihuahua, provides the first major test of Mexico City. In what may have been an attempt to deflect suspicion from the federal government, the federal police resorted to torture to force a confession, later retracted. With the new attorney general's own human rights adviser now describing the investigation as "ridiculous," the spotlight is on Ignacio Morales and the president to deliver on human rights. Guanajuato presents Salinas with a further test of his willingness to reform. Opposition gubernatorial candidates Vicente Fox (of the National Action Party) and Porfirio Munoz Ledo (of the Party of the Democratic Revolution) have stirred up extraordinary public interest in the Aug. 18 election. Both have pledged to seek a constructive relationship with Mexico City. Should either become governor of a state so close to Mexico City, it would set an important precedent. With Congress now watching Mexico more closely, Salinas may see a reason for a clean election. Though it is too late to enact a democratic electoral law and create impartial authorities, the president has time to instruct his partisans to respect the vote on election day. Salinas should invite foreign observers, as is routine elsewhere. In our new partnership with Mexico, Congress must encourage Salinas to pursue such an policy as a first step toward real reform.