White House Hauls Out Heavy Artillery in NAFTA Battle
BIG, white tents sprouted on the South Lawn of the White House yesterday morning as President Clinton cranked up his efforts to pass the North American Free Trade Agreement (NAFTA).
Inside the tents, hundreds of businessmen, including former Chrysler chief Lee Iacocca, buttonholed reporters and politicians to preach the benefits of free trade with Mexico's 90 million people.
The president and his allies in the business community know time is running out for NAFTA unless they can galvanize public and congressional support. The vote, scheduled for Nov. 17 in the House of Representatives, could be close.
Mr. Clinton's task is plain: he must convince Americans that NAFTA means more jobs.
Under signs on the South Lawn proclaiming, ``American Products, American Jobs ... NAFTA,'' businessmen from Massachusetts spoke of opportunities to sell oil-drilling equipment to Mexico. New Yorkers said NAFTA would expand their markets for turbines and imaging equipment. Washington State farmers said they could sell more apples. Georgians hope to sell more lumber and paper products.
The White House trade fair spotlights the president's stepped-up efforts for NAFTA. While opponents predict that Clinton faces an embarrassing loss next month in the House, the president:
* Courted members of Congress, including Republicans, with face-to-face meetings at the White House.
* Scrambled to find a compromise on his plans to raise taxes by $2.5 billion to replace tariff income lost under NAFTA.
* Sent top officials to Capitol Hill to assuage concerns that the environment will suffer because of the agreement.
* Directed the Commerce Department to produce 37 reports on separate industries in the United States, from computers to autos, that are supposed to benefit from NAFTA.
The higher taxes on international travel and transit including railroads, airlines, cruise ships, and trucks, poses the greatest short-term threat to NAFTA. Conservative Republicans, whose votes are critical to NAFTA, are balking at any new levies.
Since NAFTA will eventually reduce most tariffs between the US and Mexico to zero, the federal government will suffer a $2.5 billion loss in revenue. Under federal budget rules, lawmakers must make up for that shortfall, either by cutting programs, or by raising taxes.
MICKEY KANTOR, the US trade representative, told Congress this week that the fee on international airline and ocean liner tickets and on commercial trucks crossing international borders would be doubled to $10. Rail transit fees across the border would double to $15.
White House Press Secretary Dee Dee Myers calls the congressional opposition to the increases ``a relatively small piece of NAFTA and a problem that we think we can solve.''
Meanwhile, to counter powerful opposition to NAFTA by labor unions, the Commerce Department has produced reports showing that industries like automobiles, light trucks, computers, and telecommunications equipment will be huge beneficiaries of the agreement. US employment should rise in all those businesses, as well as many others, say senior Commerce officials.
The Mexican auto market is heavily protected today. Most assembly must be done in Mexico, and local-content requirements are strict. Even so, Mexico is America's second largest market ($6.8 billion a year) for automotive products. Mexico is the fastest growing auto market in the Western Hemisphere, with US exports there rising 221 percent in the past five years.
NAFTA would wipe out duties on US-made auto products to Mexico within 10 years. Commerce estimates that with NAFTA, US sales of auto products to Mexico will rise by $2 billion in 1994, and even more in subsequent years.
America's telecommunications industry, which makes digital switches for telephone companies, pagers, microwave transmission equipment, and other high-tech products, could also benefit significantly.