NAFTA Club's Open Door

Latins are pleased that, despite the trade fight in Congress, Clinton's team is recruiting members

AFTER the ugly cat fight in the US Congress over the North American Free Trade Agreement (NAFTA), Latin American commerce ministers' hopes for early admission to the NAFTA club dimmed.

They figured it would be a long time before the Clinton administration would have the stomach for another free-trade battle.

Not true. The NAFTA slugfest has awakened the Clinton administration's interest in the region and provided it with a blueprint for a broader hemispheric policy.

In the last two weeks, a phalanx of top Clinton officials have taken the NAFTA membership drive on the road. In Caracas on Dec. 2, US Assistant Secretary of State for Inter-American Affairs Alexander Watson said, ``NAFTA is a big step, but only the first.'' President Clinton wants to create a ``great American pact'' of ``market democracies,'' he added.

``The democracies oriented toward an [open] market policy make the best partners for commerce and investment, are the best guarantors of the rights of their citizens, and offer the best prospects for long-term stability and economic growth,'' Mr. Watson said.

The day before Watson's speech, Vice President Al Gore gave an address in Mexico City that was broadcast throughout Latin America. He called for a summit to ``rethink the way we deal with the new Latin America ... to make explicit the convergence of values that is now rapidly taking place in a hemispheric community of democracies.''

Calling NAFTA a ``starting point'' and a ``model,'' Mr. Gore observed that Latin America is the second fastest growing economic market in the world and was the fastest growing export market for US goods over the last five years. ``These developments are harbingers of a future in which the US commercial and financial future will become increasingly entwined with the Americas - not only with Mexico and Canada, but with the countries of Central America, the Caribbean, and South America as well.''

At the White House on Nov. 30, Clinton told the presidents of seven Central American nations that NAFTA would ``serve as a catalyst for the expansion of free trade to other market democracies in the hemisphere.'' He told them that his administration was now drawing up recommendations for the next steps in regional economic integration. And last week in Mexico City, US Commerce Secretary Ron Brown picked up the ``hemispheric free-trade zone'' mantra.

Topping Washington's list for new members in the NAFTA club - or similar bilateral free trade agreements - are Chile, Costa Rica, Venezuela, Argentina, and Colombia.

For the many heads of state in Latin America who have embraced the market-oriented economic reforms advocated by previous US administrations, Clinton's endorsement of regional free trade is welcome. They appreciate the policy continuity that allays fears that Mexico will be the only privileged hemispheric son with easy access to the huge, wealthy US consumer market.

Ironically, Venezuelans have just elected a president who is likely to slow down ongoing negotiations toward a bilateral US free trade agreement. President-elect Rafael Caldera says he is for regional economic integration. Last week Mexico, Colombia, and Venezuela concluded negotiations for a free trade agreement to start on Jan. 1.

But Mr. Caldera is a populist and says protecting some local industries from outside competition is warranted. Local businessmen say if oil prices remain soft, Caldera may take another look at NAFTA membership as a way to attract foreign investment. If oil prices strengthen, ``you can forget free trade. He'll turn back the clock to the protectionist era of the 1960s,'' says one prominent Caracas businessman.

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