With US Jobs at Stake, Congress Takes Wary View of Trade Pact

IF the United States Congress voted today on the controversial North American Free Trade Agreement with Mexico and Canada, the pact would almost certainly lose.

Even supporters of the agreement, known as NAFTA, concede it will travel a bumpy road in the Democratic Congress, where the top priority this year is American jobs. Critics call NAFTA a job-killer.

One strong proponent of NAFTA, Rep. Robert Torricelli (D) of New Jersey, says: "It is a fair assessment that if the vote were held today, we would probably not succeed. But ultimately, we have no choice. NAFTA must be accepted."

Former President Bush, urged on by Mexican President Carlos Salinas de Gortari, signed NAFTA on Dec. 17. President Clinton also supports the agreement, though with reservations. Analysts say that approval of the three-nation trade pact by the Mexican Senate and the Canadian Parliament is likely.

For opponents, Congress remains the last line of defense against a deal that they say would lower US wages, erode environmental standards, and send many American businesses across the southern border in search of nonunionized, $1-an-hour workers.

To meet such complaints, talks will be held in Washington March 17 and 18 among the three nations to craft supplemental agreements on potential problem areas: worker protection, environmental standards, and import surges.

Thea Lee, a trade specialist at the Economic Policy Institute, describes the current 2,000-page NAFTA agreement as "fundamentally flawed." The potential job gains from NAFTA are "small," Ms. Lee says, but the potential losses for working Americans are "quite large."

Lee's views are contested by Sandra Masur, director of International Trade Policy at Eastman Kodak Company. Ms. Masur also chairs USA*NAFTA, a lobbying organization.

Masur says the notion that there will be a massive outflow of US investments and jobs to Mexico is "absurd." She points out that the US sells more in Mexico than it buys there. The recent recession would have been even more painful without trade across the border, she says.

Masur concedes that opposition to NAFTA in Congress right now seems "daunting," but adds: "We feel we can turn that around."

At a recent panel discussion on NAFTA at the Capitol, Robert Pastor, an authority on Mexico, said NAFTA is the kind of deal that is liked by lawyers and economists, but disliked by the people.

Dr. Pastor, who is director of the Latin American and Caribbean Program at Emory University's Carter Center in Atlanta, notes that in Canada, 66 percent of the people don't like a bilateral trade pact they already have with the US. Only 6 percent approve. He says the same backlash could happen to NAFTA in the US unless Washington heads off potential areas of friction.

Worries about NAFTA focus on several areas:

* Wages. Mexican factory wages are usually in the $1-to-$2-an-hour range. Some critics suggest Mexico adopt a minimum-wage law high enough to prevent a draining away of US jobs.

* Labor standards. American workers are protected by extensive - and expensive - rules that protect their health and safety. Unless similar standards are extended to Mexico, companies will find it far cheaper to operate there and may close their American factories.

* Environment. Mexican air, water, and soil suffer from lack of enforcement of environmental laws. Some American firms, such as furnituremakers in Los Angeles, already have moved to Mexico to escape tough US standards.

These are challenging areas for negotiators. Rodrigo Prudencio, a trade and environment specialist at the National Wildlife Federation, says some Mexicans worry that the US will use environmental standards as a form of protectionism against their products.

But US critics ask: What should the US do if "widgets" produced in Mexico by a polluting factory are imported to the US at low prices? And what if those Mexican widgets drive a pollution-free US factory, equipped with expensive environmental equipment, out of business?

Or, what should the US do if Company X moves to Mexico and begins using child labor? Should its products be allowed into this country? Among the areas Pastor says need further attention in discussions about an open common market are greater investment in the US work force, and a stronger social safety net for people hurt by the agreement. He also suggests that the US may be able to learn from the European Community, where stronger states help weaker ones.

NAFTA is about more than trade, Pastor says. It is about a complex process of integrating three sovereign nations.