It's Just That Close

By GEORGE J. CHURCH

What could Bill Clinton have been thinking of? He was making progress toward persuading Congress to approve the North American Free Trade Agreement, and looked likely -- but far from certain -- to win an excruciatingly close House vote next Wednesday. So why risk giving last-minute national TV exposure to Ross Perot, NAFTA's loudest foe? Especially in the form of a debate with Vice President Al Gore, whose wooden performance in a face-off against Dan Quayle last fall contrasted painfully with Perot's barbed wisecracks in his own debates with Clinton and George Bush?

Clinton did have his reasons. He and Gore had been trying to find some whiz- bang final event that would impress an apathetic public. They were intrigued by White House poll findings suggesting that for all the fervor of his supporters, Perot also arouses considerable antipathy -- so much so that public support for NAFTA rises sharply when people find out the jug-eared Texan is against it. Maybe, they thought, the way to galvanize public support would be to remind people vividly who was leading the charge against NAFTA.

So, in late October, Gore challenged Perot to a debate on Larry King's interview show. Hardly anyone noticed, and the idea seemed dead. But then Clinton went on what amounted to a campaign swing for NAFTA; after he had finished a speech to factory workers in Lexington, Kentucky, last Thursday, the President, in his best jaw-jutting, finger-pointing style, issued a dare: he recalled Gore's challenge and said, "Let's see if he ((Perot)) takes it."

Perot was delighted. Sure, he said, I'll debate -- Gore, Clinton, both together, "anytime, anywhere." Specifically he proposed three debates, at venues that just happened to be previously scheduled Perot rallies. White House aides were flabbergasted and far from pleased by their boss's bravado. Complained one: "There hasn't been enough oxygen for Perot, and now we've gone and given him a whole lot more oxygen." For a while on Friday, some Clinton aides were suggesting, hopefully, that maybe negotiations on time and place would fail and no debate would come off. But Clinton and Perot's reciprocal dares left precious little wiggle room, and finally a deal was struck: a single, 90-min. Gore-Perot debate on King's show, Tuesday night at 9.

Whatever the outcome, the dustup is accomplishing one thing: getting the public interested. Clinton had previously signed up all five ex-Presidents and squadrons of other bipartisan cognoscenti to back the agreement, which would create a free-trade zone encompassing Canada, the U.S. and Mexico. Clinton can even count on such Republican NAFTA supporters as Henry Kissinger and James Baker, as well as multimedia star Rush Limbaugh. The President showed off some of NAFTA's big-name boosters at what was supposed to be a White House media event last Wednesday; so far as the public noticed, he might just as well have convened a meeting of stamp collectors. Indeed, it may have been annoyance at his failure to catch the people's ear that prompted Clinton to dare Perot the next day. And that did, for almost the first time, suddenly put NAFTA on all the TV news and talk shows and all the front pages.

The showdown thus escalated what were for Clinton already immensely high stakes. The President initially was slow to put on much of a drive for NAFTA, which was originally negotiated by George Bush. He let the debate be dominated by Perot and others, principally labor unions who fear a loss of jobs to low- wage Mexican competition. But now the President has made the NAFTA vote one of the defining moments of his Administration and launched an all-out campaign to win. He is opposed by one of the strangest assortments of public figures ever to find themselves in one another's company. Enmity toward NAFTA is perhaps the only thing on which Perot, Ralph Nader, Jesse Jackson and Pat Buchanan could ever agree.

The odd thing is that an agreement that has aroused so much passion, in committee rooms if not on the public stage, is likely to have only rather modest economic effects. It will not have much impact on Canada at all; Canada already has a free-trade agreement with the U.S., and its commerce with Mexico is minimal.

In regard to U.S.-Mexican relations, economists, businessmen and unionists can and do argue endlessly over a long list of topics. Will an accelerated movement of American factories to Mexico to take advantage of lower wage rates occur at all, or will it be discouraged by such factors as higher U.S. productivity and poor Mexican transportation facilities? If there is such a movement, will it be offset by higher exports to Mexico of products like computers on which high Mexican tariffs will be eliminated? Will American plants in fact gain an incentive to stay home, because Mexico will have to repeal local-content laws that force many companies that want to sell there to manufacture there? Contrariwise, whether or not many American factory owners even think of moving to Mexico, will many try to use the threat of doing so as a means of holding down American wages? Owen Bieber, president of the United Auto Workers, suggests this will happen so often if NAFTA passes that the Administration will have to set up an 800 number for unionists to call with their complaints.

What the fierce partisans never mention is that the immediate economic effects are likely to be relatively small. The Administration, for example, projects a net gain of 200,000 American jobs in the next two years. That sounds impressive, but it is not much more than the 150,000 new jobs the U.S. domestic economy is creating every month, even at the present sluggish rate of employment growth. On the other side, Perot keeps talking about a "giant sucking sound" of factories, money and jobs being vacuumed into Mexico from the U.S. He is almost the only one who can hear it. Some treaty opponents have been kicking around a figure of 500,000 jobs that might be lost, but NAFTA proponents consider that projection grossly exaggerated.

Why then the passion? Partly because in a recovery that has left many Americans still fearing layoffs -- or fearing they will never be recalled from layoffs -- any further threat to employment, real or fancied, hits a raw nerve. That effect is aggravated because the workers who might lose out to low-wage Mexican competition know who they are, or think they do, while the 12 additional people who might be hired next year by a computer maker to put together more PCs for export to Mexico have no idea that might happen. Then too, there is a vague feeling that the U.S. has often let itself be played for a sucker in trade deals. Perot has harped on that, charging that "dumb" negotiations in the 1980s cost millions of U.S. jobs. The Administration did not help itself by choosing initially to fight on narrow economic grounds (read: jobs) rather than invoke the foreign-policy considerations that actually are more important. It also has been somewhat hampered in making what could be one of its strongest arguments: to the extent that NAFTA promotes prosperity, job growth and wage increases in Mexico, it should keep at home some of the illegal immigrants now flooding into California, Texas and other states. In fact, it is hard to see anything else that might stanch that flow. Secretary of State Warren Christopher and Attorney General Janet Reno have begun to make that argument, but gingerly. The subject is a very touchy one to Mexicans and Mexican Americans, and Clintonites dare not sound like nativists warning about a Brown Peril.

NAFTA is important, however, primarily for reasons going beyond its own economic effects. Its rejection by the U.S. could topple a much bigger domino: a proposed agreement to promote freer trade among the more than 100 members of the General Agreement on Tariffs and Trade could die. That would abort an expansion of world trade that many nations are counting on to help end the recession afflicting the industrial world. The U.S. would be especially hurt: the GATT agreement contains protections for "intellectual property" (patents, copyrights) that American exporters sorely need but do not now have.

In Mexico defeat of NAFTA could provoke an anti-gringo backlash that would severely hamper President Carlos Salinas de Gortari's efforts to open up its markets and move toward fuller democracy. C. Richard Neu, the CIA's National Intelligence Officer for Economics, has told Congress that a NAFTA defeat "would be widely seen in Mexico not just as a U.S. repudiation of NAFTA but as a rejection of Mexico itself," with severe damage to U.S.-Mexican relations in many areas.

Most important is NAFTA's symbolic value. Diplomatically, the vote is being viewed as a severe test of whether the U.S. will maintain a policy of active engagement in the world or take an inward-looking, protectionist turn. Politically, Clinton's leadership is on trial. A majority of House Democrats, heavily dependent on labor support for election, are against NAFTA. Clinton has the unenviable, but vital challenge of proving that he is enough of a New Democrat to break free of union domination, and that he can bring enough Democrats along with him and forge a strong bipartisan coalition.

As recently as the first week of September, nose counts in the House showed Clinton falling 80 votes short of the 218 needed to be fairly sure of victory; by last week he was still down 30 votes. That reckoning gives Clinton eight or so legislators from sugar-producing areas who are expected to be won over by a special agreement granting sugar some extra protection from Mexican competition but who for tactical reasons are staying officially uncommitted right now. The sugar agreement is an example of a White House strategy to essentially buy votes by working out special deals for special interests.

The President's chances of making further gains, however, were not improved by last week's off-year elections. Clinton campaigned hard for New York City Mayor David Dinkins and New Jersey Governor Jim Florio, but both lost. That may cause many Democrats to ask, in effect: Why should I buck anti- NAFTA sentiment in my district to please a President whose ability to help me win re-election is suspect? One Congressman who admits he found the results "unsettling" is Robert Torricelli of New Jersey, a state where labor is strong and every other Democratic Representative has come out against NAFTA. Torricelli says he will stay uncommitted right now, but others expect him eventually to vote no.

Republicans too have been subjected to intense and conflicting lobbying pressures. Congressman Paul Gillmor of Ohio tells of receiving two letters from loyal activists who had worked hard for his election. One warned that he would never vote or work for Gillmor again if he voted for NAFTA; the other made precisely the same threat if the Congressman voted against the agreement. Republicans, however, have an extra problem: members of Perot's United We Stand America organization have been pushing hard against NAFTA in their districts, and Perot himself has been calling on them in Washington. William Goodling, a Pennsylvania Congressman, told the Texan the only time he could spare was at 7:30 a.m. Fine, said Perot, who showed up and launched into a 40- minute monologue.

Gillmor, Goodling and other Republicans say Perot has made no explicit threats to them. Nonetheless, they and others are seriously worried that the Texan and his followers will try to defeat them at the polls next year if they vote for NAFTA. That, says a White House official, is another reason why Clinton chose to take on Perot -- or have Gore do it -- in debate. If the White House can knock Perot down a peg, it will win the gratitude, and maybe the pro-NAFTA votes, of Republicans who would be afraid to tangle with Perot all alone.

Given Perot's prowess as a debater, however, that is a very big if. The White House strategy of taking him on headfirst is risky in the extreme. But not doing so might have been even more chancy. And far too much is riding on the NAFTA vote -- for Clinton, Perot, Mexico, Latin America and the world -- for the President not to give it his best shot.

With reporting by Laurence I. Barrett and Michael Duffy/Washington, Laura Lopez/Mexico City and Joseph R. Szczesny/Detroit, with other bureaus