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Hard Road Ahead for Salinas

THE handshakes and agreements emerging from this week's meetings between the leaders of Mexico and the United States should help sustain a process that started three years ago. That was when Mexico joined the General Agreement on Tariffs and Trade - breaking sharply with a history of tightly controlled, highly nationalistic trade policies. Expanded trade, moving away from heavy dependence on oil sales, is a cornerstone of the recovery program pursued by President Carlos Salinas de Gortari.

Increased investment in the Mexican economy is another building block. Presidents Salinas and Bush dealt with this, too, agreeing to a series of intergovernmental negotiations on the subject. The visit also produced agreements on promoting tourism in Mexico and on addressing the country's severe air pollution problems.

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To sum up, the Salinas stay in Washington leaves an impression of stronger ties and a hopeful future. It also leaves the impression of a Mexican president who understands how to work with Washington - instead of at odds with it.

But the bright notes have to be set against the very minor-key, even dissonant, tones still pouring from the Mexican economy. True, Mexico has experienced a surprising rate of growth, 2.4 percent, in 1989, and its inflation has fallen dramatically under strict wage and price controls. On the down side, however, Mexicans' per capita income, which has been battered in recent years, stagnated. In essence, the country is running hard to stay in place.

The debt reduction plan worked out in July between the Mexican government and US banks was a major political victory for Salinas, but it's far from clear that the additional loans he hopes for will in fact materialize.

Salinas has mapped out an economic strategy designed to restore investors' faith in Mexico. His sale of huge state-owned concerns like the national airline and phone company has drawn cheers from free-market advocates at home and abroad. In this process, however, thousands of average Mexicans are losing jobs and finding their living standards even more severely threatened.

Salinas's task, therefore, is to attract political support broad enough to enable him to ride out the social squalls his policies will stir. Bold moves against corrupt labor leaders and drug figures have helped. No one doubts this president is in charge. But Salinas knows better than anyone that the widening gap between Mexico's millions of poor and small numbers of rich could swallow up a politician. Hence his emphasis on the need to take steps on trade and investment that will create jobs for Mexico's over-abundance of workers.

Mr. Bush has every reason to want to be a partner in this endeavor. Mexico's future, after all, will be shared - one way or the other - by its neighbor to the north.

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