World Trade News: US political sands shift under Nafta - Prospects for the free trade deal are no longer so certain
JUST weeks ago, the prospects for the North American free trade agreement seemed assured. The proposed pact between the US, Canada and Mexico had the support of the Republican establishment, of Governor Bill Clinton, the prospective Democratic nominee, of the powerful Texas Democrats on Capitol Hill and most of the Democratic leadership in Congress. But the outpouring of public disaffection for 'politics as usual' has pushed to the forefront of many polls in the US election campaign Mr Ross Perot, the Texas billionaire. His campaign for the presidency is stressing jobs, and he has said a Nafta pact would send jobs to Mexico. The White House has taken its own polls and remains convinced that President Bush's support for Nafta is a winning issue. Although many working class Hispanic Americans believe Nafta would cost jobs, the Latino business organisations cautiously support the pact. Under the tightly constrained fast-track procedure - which forces Congress to vote on a trade pact without amendment - it is too late to get Nafta approved by Congress this year. Between retirements and election defeats, one-quarter to a one-third of the House could change, and no one can foresee the prevailing sentiment on trade issues. The president is expected to stage a high profile initialing of the agreement at the most politically opportune time. Politically sophisticated trade lobbyists, like Mr Harry Freeman, executive director of the MTN Coalition, believes the Democrats will use Nafta as a weapon against the president, arguing that he wants to divert jobs to Mexico. A centrepiece of the opposition will be a letter from the president to the Congress in May 1991, in which he committed himself to action on environmental issues, labour rights and worker adjustment assistance. 'Whatever the administration sends to Capitol Hill with Nafta, or if they don't send a complete package in these three areas, the Congressional Democrats will seize upon the deficiency - real or alleged, it doesn't matter,' said Mr Freeman. Governor Clinton is also likely to deem the pact the 'wrong kind of Nafta'. The environment/farm/ labour coalition opposed to the Nafta has prepared its ground well in the House. It now has 200 signatories to a resolution, introduced by Congressman Henry Waxman and majority leader Richard Gephardt, which warns that they will not support a Nafta that does not have strong environment or food safety provisions. Fifty-seven of the 200 signatories voted for the president's fast-track authority and now may be moving over on the issue. 'There are millions more people who 'get' the Nafta now,' said Ms Lori Wallach of Ralph Nader's Public Citizen. 'They have been contacted by their local churches, labour unions, farm groups, environmental or consumer organisations. There is a new awareness of its costs and that has come back to their representatives in Washington.' In the Senate, Nafta is threatened by a resolution introduced by Senator Don Riegle, which would permit Congress to amend the agreement in five areas. 'If the Riegle resolution gets through,' said one business lobbyist, 'we might as well kiss Nafta goodbye.'
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