NAFTA's Role in the Americas

WHEN Congress votes on the North American Free Trade Agreement (NAFTA) later this year, it will be shaping the future direction of United States foreign policy toward Latin America and defining the nature of US leadership in the hemisphere. US-Latin American relations today are on a smoother course than at any time in memory. The bitter conflicts of the 1980s - over drugs, debt, and Central America - have receded. Despite recurring problems and a few setbacks, the regional trend toward democracy has been

sustained. Latin American nations continue to restructure their economies along market lines and open them to international trade and investment.

Almost all countries of the region now want closer economic ties with the US. Latin American governments have also demonstrated a new willingness to cooperate politically with Washington. The main challenge for US policy in Latin America is no longer how to resolve old conflicts. It is how to take advantage of fresh opportunities.

Although hardly guaranteed to last, these favorable trends provide the basis for an enduring relationship that serves the interest and values of both the US and Latin America - including (1) the advancement of democratic practices and respect for human rights; (2) the achievement of sustained economic and social progress; (3) the need jointly to address such shared problems as environmental deterioration, drug trafficking, and refugee and migrant flows; and (4) effective cooperation in global forums like

the United Nations, GATT (General Agreement on Tariffs and Trade), and the World Bank.

NAFTA is the essential cornerstone of such a relationship. It is a crucial test of US interest in forging long-term, constructive ties with Latin America.

In the first instance, the ratification or rejection of NAFTA will critically affect US relations with Mexico - by far the most important US partner in the hemisphere, and one of the two or three most important in the world. No other country influences the daily lives of Americans more than Mexico, nor is there any other country in which political and economic instability would be more damaging to the US.

There is broad public support in Mexico for NAFTA. After two years of negotiation and with a signed agreement in hand, expectations are high that NAFTA will be approved and contribute significantly to Mexico's economic advancement. NAFTA's defeat would be viewed as a rejection of a Mexican overture for stronger US ties. Mexican attitudes toward the US, both official and public, could quickly sour. Any resulting economic decline would be blamed on Washington. Politics in Mexico might well take a nationali stic and anti-American turn, with growing popular support for political leaders opposing collaboration with the US and preferring a return to more insular Mexico. Prospects for US-Mexican cooperation in all areas would diminish.

The defeat of NAFTA would also be a blow to the rest of Latin America - and to the quality of US relations with the region. As the countries of Latin America have restructured their economies and reduced trade barriers, they have been seeking and expecting a response from the US. The enthusiastic reaction to President Bush's Enterprise for the Americas Initiative reflected, more than anything else, Latin America's interest in free trade with the US, seen as assuring them stable access to their major mark et and stepped-up foreign investment to fuel their economies and reinforce market reforms.

Throughout Latin America, NAFTA is viewed as the first building block of an economically integrated hemisphere.

NAFTA, in short, is the linchpin of any effort to build effective cooperation between the US and Latin America.