Mexico, Especially Its Ruling Party, Anxiously Awaits the NAFTA Vote

IF the North American Free Trade Agreement (NAFTA) is approved by the United States House of Representatives on Nov. 17, Mexican President Carlos Salinas de Gortari will finish his term as a hero.

The popular reformer will be carried off the field on the shoulders of jubilant supporters, analysts say, and his party will coast to an election victory next year.

But if NAFTA is voted down, Mr. Salinas will walk off as Mighty Casey who struck out.

``Salinas has batted practically 1.000 for five years. But he's got one pitch now. If it's a strike, he loses the entire World Series,'' says political scientist Federico Estevez of the Autonomous Technological Institute of Mexico. ``It's terribly unfair, but it's that serious a political blow.''

Salinas has sold off hundreds of bloated and inefficient state enterprises. He's wrestled triple-digit inflation down to a projected 7.5 percent annual rate for 1993. Mexico's abysmal debt loads are remarkably lighter now. Investment is at record levels.

Democratic political reform hasn't been as high a priority, although Salinas has tackled some decades-old touchy political problems, such as church-state relations and agricultural reform. Less than a year from the presidential elections, the capstone of his sweeping market-oriented reforms, NAFTA, remains ``a crap shoot,'' as one analyst puts it. And that poses a potential political problem.

Although inflation has been tamed, economic growth has ground to a halt. Unemployment is rising. ``Poor people perceive the economic situation as slightly worse than a year ago,'' Mr. Estevez says. ``But their expectations are as high as those of the middle class. If NAFTA dies, future expectations go into a free fall. The opposition argues the Salinas reforms produced no palpable changes. Next year's election becomes a horse race.''

Mexican officials are caught in a tense waiting game. The normal speculative buzz over the naming of the Institutional Revolutionary Party's next presidential candidate reached such a crescendo that Salinas made it a point last week to deny that the candidate would be named in November. One rumor purports that the US is pressuring Salinas to name Finance Minister Pedro Aspe Armello as the candidate before Wednesday's NAFTA vote.

``It's crazy,'' sighs a senior Mexican government official who disagrees that NAFTA's defeat would be a catastrophe. ``It would slow down investment and job creation, but only temporarily,'' he says.

Yet analysts here say a NAFTA defeat would likely create an anti-American backlash and bolster prospects for the center-left candidate, Cuauhtemoc Cardenas Solorzano, who opposes NAFTA. ``It took a lot for Salinas to open up, to move the nation beyond the lack of trust in the US - a distrust founded on numerous historical precedents,'' the official notes. ``A NAFTA defeat would make it very difficult for the next president to have good relations with the US,'' he adds.

Repercussions of a NAFTA failure were seen last week. Many Mexicans were outraged by perceived racist remarks by Ross Perot during his televised NAFTA debate with Vice President Al Gore Jr. Mr. Perot's comment that the dream of some Mexicans is ``to someday have an outhouse'' prompted one angry legislator to push for a constitutional amendment to ban from Mexico anyone ``dedicated to denigrating and offending Mexico.''

Here in Mexico, NAFTA's passage isn't in doubt; the ruling party dominates the parliament. And almost every economic study shows Mexico will benefit from NAFTA. But public support has slipped. In 1989, NAFTA drew support from 78 percent of those surveyed. By February 1993, that support had fallen to 47 percent, according to Market and Opinion Research International, a Mexico City polling firm.

Pollsters blame the decline on the economic slowdown and open-market policies already in place that have caused job losses in Mexico's leather, textile, toy, chemical, and paper industries.

On Nov. 5, Salinas drew some uncharacteristically public criticism from the business sector when his trade minister agreed to alter the original accord by tightening up export restrictions on Mexican sugar, citrus, vegetables, glass, wine, and electric appliances. The deal was cut to win more votes in the US House of Representatives. But it was portrayed in the local press as going back on a Salinas promise not to renegotiate the treaty with the Clinton administration.

While supporting free trade in principle, Mexican businessmen are uneasy about inviting their ``800-pound gorilla'' neighbor onto the dance floor. A survey of small businesses done by two Mexican government agencies shows 76.6 percent feel NAFTA would endanger their performance in the domestic market.

Pedro Cruz, president of Arne, a small Mexico City company that imports water and air purifiers, expresses the mixed feelings felt by businessmen. ``NAFTA will benefit Mexico, but it will be 10 years before we see those benefits,'' he says. The tariffs on US equipment he sells here will gradually drop, probably increasing his sales in the long run. But overall, he notes, ``Mexico doesn't have the infrastructure, the quality controls, and the technology to compete with the US and Canada. We're consumers of these countries. Perhaps in 10 years, given the competition, we'll learn how to compete and how to increase our exports.''

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