CONGRESS MUST CALL THE TUNE ON MEXICAN TALKS
President Bush needs Congress' go-ahead to revive the 107-nation General Agreement on Tariffs & Trade talks, which stalled last December, as well as its authorization to negotiate a free-trade pact with Mexico (page 33). The GATT talks, if they succeed, will open global markets to increased exports of U. S. services and farm products. The more controversial pact with Mexico would be the first-ever attempt to open the border between an advanced industrial country and a developing country to free flows of goods and services. Mexico's large, low-paid labor force could become a magnet for stepped-up investments to serve the North American market--including Canada, which already has a free-trade pact with the U. S.
Arguably, however, the attempt is premature. The yawning economic and social disparities between the U. S. and Mexico create the potential for lost jobs and departing industry, as well as side effects such as worsening environmental problems. To ease such worries, the Administration is expected to promise that it will expand programs such as retraining for laid-off American workers and to insist that Mexico improve its performance in areas from workers' rights to environmental protection. If the resulting free-trade agreement doesn't deliver on Congress' preconditions, it will probably be rejected.
Congress needs to spell out a negotiating mandate to make sure that any accord's benefits outweigh its drawbacks for the U. S. But it's not necessarily a tragedy if a satisfactory free-trade deal can't be struck at this time. U. S.-Mexican economic ties can continue to expand rapidly, as they have in recent years, under less sweeping agreements. That should narrow the economic and social gap between Mexico and the U. S.--and thus pave the way, eventually, for full-scale free trade.